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Make in India: DoT may ask BSNL to try local end-to-end networks for 4G upgrade

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The Department of Telecommunications (DoT) is mulling advising BSNL and MTNL to test out locally consolidated networks for a few months before they take a call on who to select to upgrade their 4G spectrum services, Hindustan Times has learnt.

The decision can have far-reaching ramifications as the new setup, if found feasible, can be replicated for other network providers and to upgrade to 5G services, the tender process for which is yet to begin.

HT has earlier reported that the DoT had set up a six-member panel to look into the 4G upgrade tender after it was scrapped on July 1. The decision had come in the wake of 20 Indian soldiers being killed in the Galwan Valley by China. The decision was also taken in keeping with the preference to Make in India policy of the telecom department, and a bid to reduce reliance on Chinese companies such as Huawei and ZTE.

The six-member panel, which has representatives from DoT, BSNL, MTNL and the industry, has already met five times and is in the final stage of outlining requirements for the fresh tender. The final tender requirements are likely to be concretised by the end of the week. The Rs 7,000-8,000 crore tender is part of the BSNL revival package that will allow it to expand its telecom presence.

“Indian manufacturers at present do not have a turn-key setup in place,” said a DoT official who did not wish to be named. “A turn-key setup offers end-to-end network, including both radio and core requirements that are consolidated at a central level by a single operator.”

According to the official, tech giants such as Nokia and Airtel have their own turn-key setups in India. The official that while seven companies manufacture radio equipment, used to set up towers, only two companies at present are capable of making core equipment, which translates the signals to provide telecom services.

“The core equipment is responsible for translating the signals that are carried by the radio equipment,” the official said. “The new approach likely incorporate multiple vendors to setup an end-to-end network.”

A member of the panel, on the condition of anonymity, told HT that reservations had been expressed about the ability of Indian tech companies to set up the network.

“We are discussing telling BSNL and MTNL to set up at least 10-20 towers using local equipment and connect it to the core,” said the member. “They can test if the equipment is giving appropriate results.”

According to experts, nearly 75% of the telecom equipment is sourced from companies outside India, especially the internal components. Two major Chinese firms with a stake in the Indian market are ZTE and Huawei, both Chinese companies. Other major players include Nokia, Ericsson and Samsung.

“We are not saying that Nokia or Airtel will not be able to provide services, but the idea is that the local manufacturers get a greater stake,” said the first official. “Nokia has an India-based office that employs many Indian engineers.”

At present, according to the preference to make in India policy of the DoT, those doing over 50% addition to product and network by using equipment made in India and not just assembled here given preference.

“If Tech Mahindra gives a bid for 112 and Nokia for 100, Tech Mahindra will be asked to match the bid,” said former DoT technical advisor RK Bhatnagar. “Ercisson’s value addition, for example, would be around 25%, making them eligible to be in preference category.”

Bhatnagar added that a version of the DoT’s proposal was discussed at a meeting convened by NITI Aayog in early July.

“Private players such as Tech Mahindra made a presentation that they have the capability,” said Bhatnagar. “They had asked for an opportunity, and NITI Aayog had suggested the same to DoT.”

“The players can be asked to set up a consolidated network, which will then be tested over 4 months to see if it’s a workable solution and then can be replicated in other places,” he added.

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Vodafone v/s India: Indian govt may have to pay Rs 85 crore if it decides not to appeal

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The Indian government may have to pay a total of Rs 85 crore, if it decides not to appeal against Friday’s ruling of the Permanent Court of Arbitration (PCA) in the Rs 22,100 crore retrospective tax dispute with Vodafone Group. The arbitration tribunal on Friday delivered its verdict in favour of Vodafone against Indian government’s retrospective tax demand of capital gains tax.

As per an IANS report on Saturday, Finance Ministry sources said that the court has asked the Indian government to pay only 4.3 million pounds, or about Rs 40 crore, which is 60 per cent of the tribunal’s administrative cost while the rest 40 per cent would be borne by Vodafone. Also, the government may have to refund the tax collected, which is about Rs 45 crore, only if it does not go for appeal against the award.

Therefore, the total outgo would be around Rs 85 crore only.

The Finance Ministry, in a statement, said that the government will make a decision on the further course of action, including legal remedies, among other options including legal remedies before appropriate fora.

The statement issued by the ministry read as: “The Finance Ministry has just been informed that the award in the arbitration case invoked by Vodafone International Holding BV against Government of India has been passed. The Government will be studying the award and all its aspects carefully in consultation with our counsel”.

Vodafone had moved the International Court of Justice (ICJ) in 2016 due to a lack of consensus between the parties’ arbitrators in finalising a judge for a tax dispute. Following this, a tribunal was constituted in June 2016 after Vodafone challenged India’s use of a 2012 legislation that gave it powers to retrospectively tax deals like Vodafone’s $11 billion acquisition of 67 per cent stake in Hutchison Whampoa in 2007.

The retrospective tax law had been enacted after a Supreme Court judgement went in Vodafone’s favour.

Vodafone had challenged the tax department’s demand of Rs 7,990 crore as capital gains tax (Rs 22,100 crore after including interest and penalty) under the Netherlands-India Bilateral Investment Treaty (BIT). In 2007, the Income Tax Department had slapped a demand notice seeking capital gains tax.

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Diesel rates marginally lowered in metropolitan cities for fifth day in a row, petrol unchanged

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Diesel prices continued to fall on Monday, making it fifth day in a row, even though globally crude prices remained steady. In the national capital diesel was priced at Rs 71.43 per litre, down from Rs 71.58 on Sunday.

Similar trend was witnessed in other major metropolitan cities. In Mumbai, diesel was being sold at Rs 77.87 on Monday, against the previous levels of Rs 78.02.

In Chennai and Kolkata diesel rates was at Rs 76.85 and Rs 74.94 on Monday, respectively.

Previously, diesel was priced at Rs 76.99 in Chennai and Rs 75.09 per litre in Kolkata.

In September, diesel rates have been dropped by Rs 2.13 per litre in Delhi this month while petrol price fall has been relatively slower at Rs 0.94 per litre in September.

The recent fall in prices comes in the wake of softening of global oil prices as an extended run of Covid-19 has depressed demand and created a glut in the market.

Prices of petrol, however, remained unchanged for the third straight day at Rs 81.14, Rs 87.82, Rs 84.21 and Rs 82.67 per litre across Delhi, Mumbai, Chennai and Kolkata, respectively.

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Vodafone Idea Board rummaging through all proposals to raise funds; meeting scheduled for September 4

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The Board of Directors of Vodafone Idea Ltd (VIL) are going to hold a meeting on Friday (September 4) to consider and evaluate all proposals for raising funds in one or more tranches by way of a public issue, preferential allotment or private placement among other options.

The announcement comes a day after the Supreme Court on Tuesday delivered its verdict on the staggering payment of Adjusted Gross Revenue (AGR) due issue. The apex court gave a 10-year timeline to the telcos to repay their dues, with an upfront payment of 10 per cent by March 31, 2021.

The company in a regulatory filing, said, “the Board of Directors of the Company is scheduled to be held on September 4, 2020, inter-alia, to consider and evaluate any and all proposals for raising of funds in one or more tranches by way of a public issue, preferential allotment, private placement, including a qualified institutions placement or through any other permissible mode and/or combination thereof as may be considered appropriate, by way of issue of equity shares or by way of issue of any instruments or securities including securities convertible into equity shares, Global Depository Receipts, American Depository Receipts or bonds including foreign currency convertible bonds, convertible debentures, warrants, and/or non-convertible debentures including non-convertible debentures along with warrants, which may or may not be listed.”

“A meeting of the Board of Directors of the Company is scheduled to be held on September 4, 2020, inter-alia, to consider and evaluate any and all proposals for raising of funds,” the company said in a regulatory filing late Tuesday.

As per government’s assessment, Vodafone Idea owed a total of Rs 58,254 crore to the Department of Telecommunications, (DoT). As per the government, the operator now owes balance AGR dues of around Rs 50,399 crore.

On Wednesday, shares of Vodafone Idea rose after plunging in the previous session weighed down by the Supreme Court verdict. Around 11 a.m., its shares on the BSE were trading at Rs 9.61, higher by 8.10 per cent from its previous close.

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