Telecom licence fee raj ends
Divestment schedule approved
Sensex hits 22-month high, cyclicals spurt
Bengal may tap IDFC loan
Raymond starts cost-cutting drive
MTNL bonanza for Netizens
Tyre dealers offer to invest in Dunlop
Business briefs
Foreign Exchange, Bullion, Stock Indices

New Delhi, July 6 
The Union cabinet today permitted telecom operators to switch over from the present licence fee regime to a revenue-sharing arrangement with the government effective from August 1.

The facility will be extended to all telecom services including basic, cellular and paging and other value-added services, information and broadcasting minister Pramod Mahajan told reporters here .

However, the switchover will be allowed only after the operators pay up 20 per cent of their licence fee arrears. They will have to make another upfront payment of 15 per cent of the arrear licence fees before August 15.

Mahajan said these companies will have to pay the remaining amount plus interest by a future date to be fixed by the government.

The minister said the integration of licences issued under the 1994 telecom policy into the new telecom policy 1999 will be from the prospective date to be decided by the government.

Mahajan said relief will be provided to the licensed telecom operators by extending the period of their licences from 10 years at present to 20 years from the date of existing licence agreement.

The effective date of all licences for basic and cellular services will also be extended by a period of six months except for the metro cellular areas.

Relief by way of re-schedulement of payment of arrears will also be given.

The package will have to be accepted in toto by the 1994 licensees. After that, all legal proceedings will be withdrawn, the minister said.

He clarified that both the cellular operators in each service area will have to accept this package to bring ?multipoly?? otherwise both will remain under the old regime.

Mahajan said there shall be a lock-in period of five years from the date of the licence agreement in respect of the present shareholders. No transfer of shares will be permitted during this period.

Pvt FM broadcasting

The cabinet also approved the entry of the private sector into FM (frequency modulation) radio broadcasting services in addition to the FM broadcasting network of All India Radio (AIR). It has been decided that licences will be given to private operators in 40 cities. With this decision nearly 150 new FM channels are expected to be set up in the country.

The minister said the government had opened up the FM band to the private sector in view of constraints of finance, staff etc. The news and current affairs programmes will not be given to the private broadcasters.

Only 100 per cent Indian companies will be allowed to enter FM broadcasting. All broadcasters will have to follow programme and advertising code applicable to AIR.

Under the proposed policy, private operators have to set up their own studios and transmitters and they will be given additional frequencies.

Mahajan said suitable parameters will be evolved to evaluate technical, managerial and financial competence of the applicant.

Strict capital adequacy norms have also been fixed for the private FM broadcasters. Each FM station must have a minimum capital investment of Rs 3 crore and a working capital of Rs 2 crore.

An applicant will be permitted only one licence per centre. The licence will be issued under the Indian Telegraph Act, 1885 and Indian Wireless Telegraphy Act, 1933.

He said 12 channels would be available in four metro cities like Calcutta, Delhi, Chennai and Mumbai for the private operators.    

New Delhi, July 6 
The cabinet committee on disinvestment today approved the selloff schedule for 1999-2000 covering state-owned companies like Gas Authority of India Ltd (Gail), Videsh Sanchar Nigam Ltd (VSNL), Mahanagar Telephone Nigam Ltd and Indian Tourism Development Corporation (ITDC).

The government is targeting proceeds of Rs 10,000 crore this year from the selloff. Last year?s target of Rs 5,000 crore was exceeded with proceeds totalling Rs 6190 crore.

The committee decided that 180 million shares of Gas Authority of India Ltd (Gail) would be sold in the global depository receipt (GDR) and domestic markets.

One million shares of Videsh Sanchar Nigam Ltd (VSNL) will be sold through a retail offering in the domestic market.

It has also been decided to complete the process of offering five per cent of the total shareholding of Indian Oil Corporation (IOC).

The government decided to divest up to 74 per cent in ITDC. As a result, the government?s share in ITDC will come down to 26 per cent. It was also decided to bring down the government?s holding in Madras Fertilisers Ltd to 26 per cent from 32.4 per cent at present.    

Mumbai, July 6 
The Bombay Stock Exchange (BSE) sensitive index (sensex) hit a 22-month high at 4350.40 today as the markets glided into a consolidation phase marked by heavy buying in cyclical shares.

Though the 30-scrip index gained only 26.30 points when it closed at 4306.40, there were many in the market who felt the pattern of today?s trading heralded a period of sustained bull-driven upsurge.

The roots of optimism lie in the receding war fears and the World Bank?s $ 386-million loan to India, the first since a panoply of economic sanctions were imposed on the country after the May 1998 nuclear tests.

A rush for cyclical scrips such as ACC and Grasim by foreign institutional investors (FIIs) and local operators was the driving-force behind the day?s early spurt to 4350.40. However, a bout of profit-taking by financial institutions, and the fact that it was the last day of NSE?s current settlement, diluted the gains in the second half of the trading session.

While foreign funds picked up shares of Sterlite Industries, Colgate, Larsen & Toubro and Bhel, local institutions offloaded Telco, Tisco, SBI, HLL and ITC scrips, all of which suffered minor losses.

Brokers say the market is likely to fancy cyclical stocks but the buying may spread to a few infotech and pharmaceutical stocks in the next couple of days.

The volume of business was high at Rs 2,103.41 crore compared with Monday?s Rs 1,797.22 crore.

In the specified group, 13 scrips, including the index-based ACC and Grasim, hit the upper-end circuit filters after exhausting their daily limits.

Rupee dips

The rupee weakened marginally to 43.27/29 against the dollar due to moderate demand for greenbacks from corporates and banks.

After opening at 43.22/24, the currency moved in a wide range of 43.23 and 43.28 before closing at 43.27/29 compared with Monday?s finish of 43.24/25.    

Calcutta, July 6 
The state government has decided to borrow Rs 300-350 crore from the West Bengal Infrastructure Development Finance Corporation (WBIDFC).

The corporation came out with a Rs 200-crore bond issue that closed recently and was oversubscribed by Rs 255 crore. The state wants to borrow a part of this amount but does not want to provide any list of specific projects that it will take up.

WBIDFC, a non-banking finance company, has placed a condition that any loan to the state government would necessarily have to be related to infrastructure projects and that it would monitor the progress of the projects.

The NBFC?s board, which includes top government officials?finance secretary Ashok Gupta, power secretary Ramsevak Bandyopadhyay, secretary of the minor irrigation department Ranu Ghosh, and three zilla sabhapatis?met here today to discuss how to use the Rs 455 crore it raised from the bond issue.

The bonds have been issued at a high coupon rate of 14 per cent and WBIDFC has to stick to the interest payments. To be able to do so, it has to lend its funds carefully, whereas the state seems to be asking it to lend for some ?loosely? defined purpose.

When contacted, officials, however, clarified that state finance minister Asim Dasgupta plans to divert many development projects to the company.

The finance department has, however, yet to draw up a list of specific departments which will fund their projects through the WBIDFC funds.

?As the state has already obtained permission from the central government to borrow up to Rs 500 crore from WBIDFC, it is hardly unusual for them to ask for the loan,? the official said.    

Mumbai, July 6 
Raymond Ltd has embarked on an exercise that will help it to drastically cut costs. As part of the exercise, it has set up internal task forces for all the sectors in which it has a presence.

The new managing director, Gautam Hari Singhania, in an interview to The Telegraph, said: ?These task forces will look into various aspects of a particular business. It?s a long drawn-out process and the benefits will accrue gradually.?

However, Singhania added that the exercise was initiated when Raymond hired management consultants Arthur Andersen to advise the company on cost-cutting measures.

?Every business unit in the company will have a task force manned by members from within the unit,? he said.

Besides, the company proposes to retire costly debt from its books by replacing it with cheaper loans.

The transition at Raymond?s, which saw Gautam Singhania taking over from his father Vijaypat Singhania, will hasten the consolidation process as a result of which the company will concentrate on its core strengths.

Raymond is looking for buyers for its silicon steel unit, which is the only plant in the country making this particular grade of steel. In 1998-99, the company saw output rising by 29 per cent with a commensurate increase in sales.

While admitting that the company was scouting for a buyer for its steel unit, Singhania denied that it has plans to sell its cement plant. ?For the moment we have no such plans,? he said. Last year, the company produced 1.5 million tonnes at its 2.2 million tonne cement plant.

This year, with a turnaround in the industry, the company expects to produce at least 1.8 million tonnes of cement.

The company also expects to shore up its distribution network for its range of brands in the textile business. Raymond, which has around 235 franchisees for its brands, will extend it to 300 within a year and a half.    

New Delhi, July 6 
Mahanagar Telephone Nigam (MTNL) today slashed its Internet rates by 15 per cent, reduced renewal charges by an equal margin and introduced two new packages of 50 and 30 hours. The MTNL board, which met here today, also cleared a proposal calling for an extra-ordinary general meeting (EGM) to change the articles of association in a way that will help the company operate as a Navaratna public sector unit (PSU).

?The board has approved a 15 per cent cut in Internet charges for new subscribers and renewals. The new tariffs will be valid for three months from the date they are introduced,? MTNL chairman and managing director S. Rajagopalan said.

The company will seek clearances from the Telecom Regulatory Authority of India (Trai) and the department of telecommunications (DoT) before finalising the dates for implementing the new rates.

Subscribers who opt for the new 30-hour slab at Rs 500 per month can use services only for an hour everyday. If they need more time on a given day, they will have to shell out Rs 10 for every extra hour. If a subscriber continues to use this scheme for a year, the renewal charges will be reduced to Rs 400, Rajagopalan said.

The 50-hour slab for Rs 1,500 will be valid for one year. MTNL will offer two megabits per second space and an ID free for subscribers to this scheme.

The company?s Internet rates for 100 hours will now be Rs 2,150 as against Rs 2,550 while renewal charges have been revised to Rs 2,050.

?We decided to cut our rates after watching the prices offered by our competitors. The main intention is to stimulate demand for Net services in the country,? Rajagopalan said.

The company has held discussions with the department of telecommunications (DoT) to allow its Internet subscribers an all-India login facility.

?We have already taken up the issue of permitting subscribers to log in from anywhere in the country with the DoT. We expect the clearance early next month,? Rajagopalan said.

MTNL?s offer to provide its existing fixed-line customers in Delhi and Mumbai a free phone, if they take an Internet connection, will continue, Rajagopalan said. The scheme was struck down by the telecom watchdog after its launch on July 1.    

New Delhi, July 6 
The All India Tyre Dealers? Federation (AITDF) is willing to invest Rs 75 crore to revive Manu Chhabria-run Dunlop?s two tyre making units at Ambattur and Shahgunj provided the management of the company is changed.

In a letter to Prime Minister Atal Behari Vajpayee and West Bengal chief minister Jyoti Basu, the federation has urged the Bengal government to involve the dealers in the process of reviving Dunlop.

?We want the central government to find a quick solution to the sick tyre units of Dunlop. We are ready to give half the amount required for the factories? revival as deposits. This works out to some Rs 75 crore, but we will not put in that amount if the management of the company is not changed,? said S.P. Singh, AITDF convenor.

The letter says: ?Due to poor track record of the management it cannot be trusted on the face value of (its) plans to revive the company. The Centre should take a balanced stand without delay to revive the company.?    

Tata Sons board recast soon

Tata Sons is expected to take a decision on the induction of new directors next week to replace the six directors who will be stepping down at the next board meeting. ?We will be deciding sometime next week,? Tata Sons? chairman Ratan Tata said. Six directors of Tata Sons ? Nani Palkhivala, Homi Sethna, Darbari Seth, J.J. Bhabha, F.C. Kohli and S.R. Vakil ? will be retiring from the board as they are above 75 years.

Jet CEO quits

Chief executive officer (CEO) of Jet Airways Niks Kardosis has resigned, company sources said. In a letter to company chairman Naresh Goyal on July 2, he quoted personal reasons for quitting the airline, which he joined in 1994. Sources said his resignation has been accepted and Saroj Datta has been asked to take charge.

Corp Bank move

Corporation Bank today announced the induction of four shareholder directors in its board as a step towards adopting the Cadbury Committee recommendations.

Birla donation

The B.K. Birla group of companies together with B.K. Birla, his wife and two daughters have contributed Rs 51.5 lakh to the Army Central Welfare Fund.

Citibank facility

Citibank today successfully tested Internet banking in Bangalore. The multinational bank also introduced debit cards in Delhi and Mumbai.

Kothari payout

Kothari Pioneer Mutual fund today declared a 35 per cent tax-free dividend for 1998-99.    

Foreign Exchange
US $1	Rs. 43.29	HK $1	Rs.5.50*
UK ?1	Rs. 67.87	SW Fr 1	Rs. 27.20*
Euro	.Rs. 44.18	Sing $1	Rs. 25.20*
Yen 100	Rs. 35.46	Aus $1	Rs. 28.60*
*SBI TC buying rates; others are forex market closing rates


Calcutta			Bombay
Gold Std (10gm)	Rs. 4195	Gold Std (10 gm)	Rs. 4140
Gold 22 carat	Rs. 3960	Gold 22 carat	Rs. 3830
Silver bar (Kg)	Rs. 8075	Silver (Kg)	Rs. 8105
Silver portion	Rs. 8175	Silver portion	Rs. 8110

Stock Indices

Sensex	4332.70	+26.30
BSE-100	1871.41	+17.18
S&P CNX Nifty	1241.25	+11.00
Calcutta	127.52	+0.33
Skindia GDR	NA	?

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