Telecom Tuesday: India News Digest

Telecom Tuesday is our Weekly news digest of buzzing stories relating to Indian Telecommunication Sector.

The Great telecom rip-off: 20,000 crores of Tax-payers money gone down the drain

The Tribune today has published what it calls – The Great telecom Rip-Off – and gives details about how Indian telecom Minister may have cost Indian Tax payers in excess of 20,000 crore Rupees !

source

Here are the facts published by The Tribune

• Instead of auctioning scarce and precious spectrum, which is the world-wide practice, Mr Raja chose to go for a grossly undervalued licence fee of Rs 1,650 crores. Companies awarded the licence for 2g spectrum then proceeded to avail of the FDI policy in the sector to off-load 50 per cent to 74 per cent of their shares to foreign collaborators to make a killing as valuation jumped from Rs 1,650 crores to anywhere between Rs 9,000 to Rs 10,000 crores.
• Documents available with The Tribune prove that last year Unitech and Swan, after getting the licence at Rs 1.651 crores each ?sold stakes to foreign partners at a huge premium. Unitech sold 67 per cent for Rs. 6120 crores to Norway’s Telenor and Swan Telecom sold 45 per cent to Emirates telecommunications Corporation (ETISALAT).
• TRAI cried foul over the alleged under-valuation of radio frequency and stated in no uncertain terms “our recommendation has not been followed.”

Indian telecom Subscribers still going at scorching speed!

The Telecom Subscriber growth in India seems to be unstoppable. According to latest data released by TRAI, the mobile subscriber growth numbers are enviable.

Here are the look at some Telecom Growth numbers:

Total Telecom Subscriber base

With this addition the total subscriber base of India reaches to 464.82 million as on 30th June 2009 from 325.78 million as on 30th June 2008.

Wireless Segment

The GSM and CDMA mobile services, witnessed increase of 12 million customers where Bihar telecom circles alone added more than 10 lakh subscribers during June 2009.

Wire-line Segment

At the same time the users for the Wire-line service declined by 1.34 lakh during the month of June 2009. The Delhi telecom circles added more than 20,000 subscribers during June 2009.

Tele-Density growth

The overall tele-density enhanced to 39.86% in June 2009 against 28.33% as on June 2008.

Broadband Subscriber growth

Broadband connections also witnessed a boom with the total number of broadband connections reaching to 6.4 million with around 375 Internet Service Providers (ISP) by the end of May 2009.

Public Telephones

Under Bharat Nirman Programme where the government lays focus on improving the communication networks, 264 Village Public Telephone (VPTs) were provided in the month of May 2009 in a total of 57595 villages from the target of 66,822 villages.

Did you know that BSNL is staying afloat only on Interests through Bank Deposits !

The Indian telecom growth is scorching, but the Government run BSNL, one of the biggest telecom provider is in shambles. The involvement of Government Politics has taken its toll on the telecom provider.

Even though last year BSNL was valued close to $100 billion last year, and a prime target for dis-investment programme by government, it is currently staying afloat because of interest income from its accumulated cash reserves.

Top BSNL executives speaking on condition of anonymity say the company has been severely hobbled by political interference. It ran out of capacity to expand cellular services nearly 18 months ago and no new major contracts for mobile networks and equipment have been awarded in the past 24 months.
One of the executives pointed out that in 2006 and 2007, the company matched India’s biggest and most valuable phone firm Bharti Airtel in subscriber additions, but meddling since then had resulted in growth stagnating. “BSNL has hardly any capacity addition since 2006-07 and this reflects in our performance,” the executive said. (source)

Do you smell something here? I sure do!