Reliance refutes CAG charges on RJio’s spectrum

Reliance Industries Ltd has strongly dismissed the allegations made by the Comptroller & Auditor General of India saying that its telecom subsidiary Reliance Jio has followed rules laid out by the Government from time to time.

A draft report prepared by the CAG has rejected the telecom department’s stand allowing Reliance Jio to offer voice telephony using broadband spectrum against a payment of ₹1,658 crore. The CAG said that had the Department of Telecommunications (DoT) made it clear that voice service was permitted, there would have been more demand for spectrum during the auctions held in 2010.

Replying to a questionnaire sent by Business Line, a Reliance Industries spokesperson said, “The prescribed entry fee for migration to Unified License was ₹15 crore. Therefore Reliance Jio should have been allowed to migrate to UL by payment of this entry fee of ₹15 crore and allowed to provide voice services. But Reliance Jio was made to pay additional fee of ₹1,658 crore for the migration.”

On CAG’s allegations that Infotel Broadband (the company which RIL acquired), with a low net worth, was allowed to acquire expensive spectrum, the Reliance spokesperson said that Infotel Broadband (IBSPL) fulfilled all the eligibility conditions to participate in the auction.

On June 11, 2010, RIL announced that it has entered into an agreement to acquire a substantial stake in Infotel for ₹4,800 crore. “These investments were in full compliance with the prevailing guidelines of DoT, the Companies Act and all applicable laws of the country. No lock-in period was prescribed by DoT for the broadband spectrum in the pre-auction guidelines.”

“The auction guidelines were applicable uniformly to all the participants. RIL invested in IBSPL by subscribing to the fresh equity shares at par. The entire investment of RIL was into the company and there was no transfer of shares by any existing shareholders of IBSPL,” RIL said.

Reliance said that the Government has realised full value of the spectrum since all the bidders including IBSPL acquired the spectrum at an auction-determined price.

As per the auction rules, a broadband spectrum holder can provide all the telecom services which are allowed by the respective licence it holds or acquires from time to time. Thus an operator with mobile telephony with broadband spectrum can provide all the telecom services including voice but an Internet licensee could do primarily data services.

When the Unified Licensing regime was implemented, every licence holder, including Internet operators, was permitted to migrate by paying the prescribed fee. The UL regime allows a licensee to provide all services including voice services. Therefore a broadband spectrum holder who migrated to unified licence is allowed to provide all services including voice telephony, the RIL spokesperson said.

“To say that ₹1,658 crore is not appropriate is a travesty of justice. The very sum was paid by the operators in year 2001 to acquire the licence against which they got start-up spectrum of 4.4 MHz. Reliance Jio never got any start-up spectrum against ₹1,658 crore paid as additional fee.”

Source: HBL

Russia’s Yota Devices in talks with Rel Jio, Bharti Airtel & Aircel to provide WiFi dongles and routers

Yota Devices, a Russian vendor of products which support 4G LTE, is betting big on the Indian market and is in talks with operators including Reliance Jio Infocomm, Bharti Airtel and Aircel to provide Wi-Fi dongles and routers.

Pavel Zakharkin, business development director at Yota Devices told ET that the company's talks with Mukesh Ambani-owned Reliance Jio were at an advanced stage. Reliance Jio is using Yota's routers and dongles for 4G trials on the 2300 MHz bandwidth (TD-LTE) in the country.

"We hope to close a deal with Reliance Jio for our TD-LTE devices," Zakharkin said, adding that the company's technical team was working with Jio for the testing of its devices on the telecom operator's network which is yet to be launched.

Reliance Jio, which has been doing field trials for 4G services in a limited manner, plans to conduct expanded field trials for its services from August till early 2015, Reliance Industries chairman Mukesh Ambani recently said at the company's annual general meeting.

The company is expected to launch its highspeed data and voice services on 4G in phases next year, riding a Rs 70,000-crore investment by parent Reliance Industries. "We don't announce vendor tieups. In fact, no vendor can disclose anything to media as there is nondisclosure as part of our contract in all purchases or service contracts," a Reliance Jio spokesperson said in a statement.

"Many vendors come and show their product. That doesn't mean we are buying from them." Bharti Airtel declined to comment while Aircel did not reply to an email seeking response to its talks with Yota Devices.

Yota Devices' TD-LTE enabled Wi-Fi dongle 'Amber', which can connect 11 different devices simultaneously in a home environment, and portable router 'Ruby' are the two products that the company has positioned for the Indian market.

The devices are based on Qualcomm and Altair chipsets, respectively. Zakharkin said the company would ensure the "best pricing" in India, adding that Indian market was similar to Russia's in terms of price sensitiveness. Besides routers and dongles, Yota Devices also plans to launch an upgraded version of its dual screen equipped YotaPhone that it sells in developed countries.

Source: ET

Mobile radiation not harmful, health experts and doctors

A group of health experts and doctors have come together on the same platform to dispel fears of harmful effects of radiation from mobile phones and towers.

As part of an awareness campaign by the Cellular Operators Association of India ( COAI), the experts have assured mobile phone users that radiation does not affect the health of a person.

In a video series which would soon be uploaded on YouTube, Dr Bhavin Jankharia, Mumbai-based eminent radiologist and president of the Indian Radiology and Imaging Association, said, "Mobile tower radiation is inherently a type of radiation that we believe does not produce any kind of significant harm to humans."

He said that the entire issue began when some people made some co-relation between an incidence of cancer and telecom towers without any basis.

Various environmental groups, NGOs and activists in India have voiced their concerns over adverse health affects from Electromagnetic Field (EMF) emissions from antennas on cell towers and mobile phones.

This has led to opposition against setting up of mobile phone towers on buildings by various resident welfare associations in cities.

Among others, a Bollywood actress has also become a part of these protests as she has started a 'reduce EMF radiation' campaign.

"All scientific research has found no health effect," telecom industry body COAI's director general Rajan S Mathews told PTI.

Tata Institute of Fundamental Research (TIFR)'s chemical sciences professor R V Hosur said, "Non-ionising radiation such as mobile emission causes only local change in temperature depending on the extent of use".

Indian American oncologist Dr Siddhartha Mukherjee, said if there is a link between EMF and cancer then "it must be occurring through a mechanism that lies outside anything that we know about the standard mechanisms of carcinogenesis".

"One would have to invent a novel mechanism of carcinogenesis in order to understand how radiation in that part of the spectrum can cause cancer," said the author of the Pulitzer prize winning book, 'The Emperor of All Maladies: A Biography of Cancer'.

Noted brain-tumour specialist Dr Rakesh Jalali of the Tata Medical Centre said, "The RF (radio frequency) waves used in the mobile phone technology are probably at the lowest end of the electromagnetic spectrum and does not cause any DNA kill".

In an advisory issued in September 2013, the World Health Organisation (WHO) had said that studies so far provide no indication that environmental exposure to radio frequency fields, such as from base stations, increases the risk of cancer or any other disease.

"Scientists have reported other health effects of using mobile phones including changes in brain activity, reaction times and sleep patterns. These effects are minor and have no apparent health significance," it said.

Dr Rajesh Dixit of Tata Medical Centre, who is leading a study on effect of mobile emissions on human health in Mumbai, also agreed saying there is not enough evidence proving mobile phones cause cancer in humans.

Experts claim unborn babies also do not get affected if pregnant women are exposed to radiation.

Professor Michael Repacholi, ex-EMF project co-ordinator for WHO, pointed out that the penetration depth of EMF is only 1-2 mm, so it never gets close to the foetus in any significant amount to cause any damage.

Source: ET

Telecom Dept Working on Policy to Treat Broadband as Basic Need

The Telecom Department is expected to finalise a National Broadband Policy within 100 days that would treat high-speed Internet access a basic right like education and health. “A new broadband policy is being prepared and will be finalised within 100 days,“ an official source said. Under the new policy the government has plans to include broadband among basic necessities like education and health and work towards new legislation of `Right to Broadband', sources said.

 They said it is expected to look at ways of increasing broadband penetration as well as convergence of various technologies and platforms like cable TV , optical fibre, wireless connection through spectrum, VSAT and satellite. At present there are different departments that govern various technologies. For instance, Cable TV comes under the I&B Ministry and Satellite related issues are majorly governed by the Department of Space

Source: TOI

Telecom sector: Hoping for a friendly regime

India’s telecom companies are hoping for clarity in regulatory matters and rationalization of taxes as the new government at the Centre settles down. The telecom industry has often complained about time-consuming procedures and delayed approvals by the department of telecommunications (DoT). New communications minister Ravi Shankar Prasad has promised to address these issues.

DoT officials became overcautious after the procedures that led to the telecom spectrum scandal prompted criticism from the Comptroller and Auditor General and the courts, culminating in a 2 February 2012 Supreme Court verdict that cancelled 122 telecom licences issued in 2008. The court order said procedures followed in allotting licences and spectrum to nine companies were flawed.

Tax rationalization is another key demand by telecom companies that pay 26% of revenue to the government in licence fees, spectrum usage charges, taxes and other fees. Meanwhile, the heavily capital-intensive sector has to continue investing in new technologies in some parts of the country while they simultaneously roll out older technologies in other parts. India’s telcos had collective debt of Rs.2.4 trillion in 2013, according to a presentation made by Cellular Operators Association of India (COAI), the main lobby group for GSM operators in the country, to Prasad. On 27 May, lobby group Associated Chambers of Commerce and Industry wrote to minister Prasad seeking infrastructure status for telcos, lower regulatory costs, spectrum auctions and encouragement for domestic manufacturing “to reinvigorate the industry and revive investor sentiment”.

A large amount of spectrum is currently lying unused with the government, either because of inadequate efforts to allot it for telecom services, or due to differences between the communications ministry and the defence forces, information and broadcasting ministry and the department of space. The industry wants all available spectrum to be auctioned and put to use immediately. At a meeting in May after he took charge as the new communications minister, Prasad said the government’s main focus would be creating broadband highways, apart from improving service quality and restoring investor confidence.

The government is working on several steps to encourage telecom equipment manufacturing within the country, including deferred excise duty payouts without interest, 10-year tax holidays and a Rs.1,000 crore telecom innovation fund. “We are hopeful that the new government will aid us in helping maintain a long-term clear, stable, predictable, development-oriented and investor-friendly policy regime, which recognizes the long-term nature of the investments and long project maturity requirements of the telecom sector,” said Rajan S. Mathews, director general of COAI. “India accounts for just 11% of the total investments in the Asia-Pacific region compared to China, which accounted for nearly 50% of the investments in the region in 2012-13,” he added.

Source: LiveMint

Reliance Jio to start 4G telecom services in 2015, says chairman

Reliance Jio Infocomm will launch its much-awaited 4G telecom services in 2015 in a phased manner with limited trials currently on, the company's Chairman Mukesh Ambani, said Wednesday.

Expanded trials for testing out its services on the field will begin in August and carry on till early part of 2015, before the launch where initially 5,000 towns and cities and 250,000 villages in India will be covered, Ambani said while addressing shareholders at the annual general meeting of Jio's parent, Reliance Industries.

Ambani said that Jio, a Rs 70,000-crore investment business, will be one of the largest job and wealth creators. He added that the company already directly employed over 10,000 staff, and some 30,000 from partners and vendors.

Another 100,000 people from digital infrastructure vendors to Jio are engaged in laying down the digital back bone, or fibre optic network, country wide.

The acquisition of Network 18 through Independent Media Trust will be an aspect of the digital services play that the company will offer to customer when it goes live, he added.

Jio was widely expected to launch its services in 2014 itself. It has already stitched up deals to share telecom infrastructure, including towers and optic fibre, with companies such as Bharti Airtel, Reliance Communications, Viom and American Tower Corp, besides setting up its own infrastructure. It is likely to have successfully completed trials on handsets, which can be used for providing voice over LTE on 1800 MHz, and is also talking to other handset makers to have affordable LTE supporting devices in the market at the time of Jio's launch.

Source: ET

Reliance Jio Infocomm Ltd may start 4G service with about 45,000 towers: Credit Suisse

Reliance Jio Infocomm Ltd is expected to use between 30,000 and 45,000 mobile towers when it starts offering 4G services in the third or fourth quarter of this financial year, according to Credit Suisse.

"Our recent channel checks suggest that RJio has completed about 11,000 base station installations nationwide and is possibly targeting 30,000-45,000 base stations by launch. We expect this target to be met by December 2014 or March 2015," Credit Suisse analysts Sunil Tirumalai and Chunky Shah said in a recent report.

RJio's rollout of networks is progressing at 2,500-3,000 base stations a month and the pace is accelerating, according to the report. The rollout is well spread out across the country and will continue after the launch, the analysts said.

The company has signed deals with various tower companies through which it has access to about 1,92,500 sites.

Credit Suisse estimates that RJio's network at launch will be three times larger than that of all the companies that started operations in 2009-10 and disrupted India's telecom market with their price wars.

In a report in May, Credit Suisse said almost 60 per cent of RJio's nationwide fibre project appears to have been completed, making its fibre network quite comparable to those of the top telcos in at least the top cities and circles.

In the same report, the Zurich-headquartered financial services firm had said, "With quick strides in the LTE ecosystem and the expected launch of operations by RJio by December 2014, we remain cautious on the telecom sector."

The Credit Suisse analysts said RJio is in talks with Samsung which may offer 4G smartphones starting at about $ 150 per unit and as the launch nears, other lower-end handset makers could get involved.

"Our channel checks suggest that the companies have completed trials on Galaxy S4/S4 mini (including VoLTE), and are working towards having a range of handsets starting at $ 150 by the time of launch," Credit Suisse said in its report in June.

Source:ET

India likely to have over 500 million data users by 2018 fiscal

Driven by falling handset prices and rise in smartphone penetration, data subscribers in India are likely to grow an average 25 per cent every year to reach 519 million by 2018 fiscal, a report by Morgan Stanley said.

In its report on India's telecom sector, Morgan Stanley said it believes Internet users will rise to 330 million in 2016 financial year, driven by falling handset costs, higher smartphone penetration, faster bandwidth and higher Internet content or online services. "By FY2018, we expect data subscribers to grow at a 25 per cent CAGR (compound average growth rate), from 210 million to 519 million and see a 35 per cent CAGR in data usage to750 MB per subscriber, near the Asian average," the report said.

The report said over the last two years, smartphone prices in the country have come down from USD 200 to USD 50.

As per telecom regulator Trai's data, total Internet subscribers in the country at the end of September 2013 stood at 210 million. Of those, 188 million (90 per cent users) access it on mobile devices. Of the rest, 7 million were narrowband subscribers (with speed less than 256kpbs) and 15 million were broadband subscribers (with speed of over 256kbps).

"Data is the next growth leg. We expect data contribution to more than double to 23 per cent of overall revenues (as against 10 per cent currently) in the next two years," the report said. The report said data growth will be driven by operator strategy of lower average revenue per mega byte (ARMB) for higher MB pack and operators having a strong data ecosystem, including strengthening spectrum portfolio.

"A 3G, 2GB pack in January 2013 cost Rs 750 or 38 paisa ARMB. Today a 2GB pack costs Rs 450 or 23-paisa ARMB," the report said. Morgan Stanley said voice and data rates are the lowest for Indian operators as compared to Asian counterparts and the difference between voice rate per minute and data rate per MB is not significant.

"Thus, the risk of data cannibalising voice is very low. Our case study on over the top (OTT) applications like WhatsApp and Skype indicates exponential rise in data volumes despite compression," it added.

Source: ET

Reliance Jio inks pact worth Rs 2,100 cr for 4G services with UP govt

The Uttar Pradesh government on Thursday signed 20 initial agreements with corporate houses, entailing investments worth Rs 35,000 crore.

These MoUs include a pact with Reliance Jio for providing 4G services and commitments worth Rs 2,100 crore from the ITC group in multiple sectors. The Amity Group has also signed a pact with the state government for setting up educational campuses across the state at an investment of Rs 2,000 crore.

However, no timeline of finalising these agreements or projects was announced. The MoUs were signed here by representatives of the companies with Chief Minister Akhilesh Yadav at the UP investors conclave.

Source: ET

Reliance Jio plans 14 data centres for high-speed cloud services

Reliance Jio Infocomm Ltd, the telecom unit of Mukesh Ambani’s Reliance Industries Ltd (RIL), is setting up 14 data centres across India to create a cloud-computing infrastructure that can take advantage of, and complement, its long-delayed roll-out of fourth generation, or 4G, telecom services, finally expected this year.

The cloud-based services, three company executives familiar with the plan said, will span healthcare, education and entertainment, and build synergies with the home shopping and content businesses of Network18 Media & Investments Ltd, in which RIL is acquiring a majority stake.
It will also tap Reliance Retail Ltd’s proposed e-commerce venture and projects of Reliance Foundation, RIL’s philanthropic arm.

The data centres planned by Reliance Jio will cover a total space of 700,000 sq. ft, or 50,000 sq.ft each—almost three-fourths the size of a standard football ground, said one of the three executives, all of whom asked not to be named. Two of the 14 data centres are being set up in Reliance Corporate Park, Navi Mumbai; another two at Mauda near Nagpur; four in Jamnagar, Gujarat; and two in the national capital region (NCR) centred on New Delhi. The locations of the four remaining centres aren’t known.
These data centres will enable the company to offer its planned services like “direct-to-home (DTH) television with a bouquet of almost 2,000 channels to choose from, video-on-demand, mailing and messaging services and voice over Internet telephony (VoIP)”, the executive cited in the first instance said.

Locating the data centres in India offers another advantage—it will bring under Indian jurisdiction data that has until now been the preserve of global servers, less than 7% of which are located in India.
Google Inc., Microsoft Corp. and Amazon Web Services (AWS) are estimated to host a million-odd servers each in their data centres. A large data centre typically houses 50,000 to 100,000 servers.
“If you’re hosted in the country, companies that host their data on your servers (in the local data centre) get a sense of control over the data. Besides, the government, too, gets a level of comfort since it can have access to the data if needed (ostensibly for security reasons),” said a telecom analyst who did not want to be named.

At the Indian Institute of Technology Bombay (IITB) Techfest in January, Reliance Jio demonstrated its 4G capabilities including wireless machines that measure blood pressure and record data on the cloud so it can be accessed remotely, and mobile phone-based urine analysis.  Among the company’s entertainment services was one called Catch-up TV, using which one can watch TV shows that are seven days old via an Android-enabled set-top box.

The company also demonstrated a Jio Drive service that can be used to store videos, documents and pictures and allows easy sharing.

The data centres, the executive explained, will feed into the national-level fibre optic network, which is currently being laid by the company, and “pass through state highways, major cities and rural areas, within which, we will have a concentric circle service system (CSS) connecting an intra-city wired fibre optic connection that will finally lead to the fibre-to-the-home (FTTH) line”. The CSS ring will be supported by hundreds of monopoles unlike the regular rooftop mounted telecom towers typically used by telecom service providers, he added.

Monopoles, or ground-based masts (GBMs), will double up as street lights and surveillance systems, and provide real time monitoring of traffic and advertising opportunities, he added. The GBMs will use an “innovative battery back-up system and mobile battery charging system” instead of diesel generator sets, which will help the company reduce capex (capital expenditure) and opex (operating expenditure) since they will not require any cooling unit nor manpower to guard them, the first person said. “Additionally, we will mount solar panels on the mast surface to charge the batteries,” he added.

The second executive said typically these telecom towers are easier to install and faster to replicate and require only four square metres of area with the entire electronics built inside the mast of the tower.
The first person said that apart from offering services to its retail customers, Reliance Jio will also offer to host data such as police records, income tax data and data related to the unique identification (Aadhaar) cards of individuals for the government.

“This depends on whether the government agrees to this for a fee. Currently, talks with various government bodies are on,” he said. Reliance Jio has pan-India 20MHz broadband wireless access (BWA) spectrum in the 2,300MHz frequency band in 22 telecom circles and 5-7MHz spectrum in the 1,800 MHz band in 14 circles which it plans to use for offering high-speed 4G services. A detailed questionnaire sent to RIL on 30 May, but there has not been any response as of press time on Wednesday.

“Typically telecom companies have anywhere between two and four data centres, providing for a main site as well as back-up and disaster recovery, located in different places,” said Mohammad Chowdhury, telecom industry leader at PricewaterhouseCoopers (PwC). “If a service provider wishes to offer cloud-based or hosted or managed services to its customer base, then it might significantly need more capacity,” he added.
Vodafone India Ltd has one data centre in Pune and one in Bangalore. Bharti Airtel Ltd, India’s biggest telecom service provider, has outsourced the data centre activity to a third party.

Reliance Jio said it will launch its high-speed data services across the country using a blend of several technologies, including two rival 4G high-speed wireless technologies, as well as other network options like FTTx (fibre to the location) and Wi-Fi hotspots. The second executive also pointed out that “on the devices front”, Reliance Jio will offer a “smartcard-type of device that will create a hot spot to enable any device (with a wi-fi port)” to use its 4G services.

Reliance Jio does face its share of challenges in terms of return on investment and capturing market share. According to an April report by CLSA, Reliance Jio has invested $6 billion (about Rs.36,000 crore) in the telecom business till date. The company, according to industry analysts, is expected to spend $8-9 billion in total.

For one, the commercial launch of the project, launched in 2010, has been inordinately delayed. It was in 2010 that RIL acquired a 95% stake in Infotel Broadband Services Ltd, the only company to win BWA spectrum across the country in an auction the same year. “Reliance’s investment in the telecom business will generate very poor returns, given that it acquired 2.3 GHz (gigahertz) spectrum in May 2010 for $2.1 billion and then spent a meaningful amount of money on trials and preparations for the commercial launch, apart from interest payment on debt,” said a 24 March note by analysts at Kotak Institutional Equities.

According to a 29 April report by brokerage firm CLSA Ltd, the three biggest challenges for Reliance Jio are “addressing the reach and penetration shortcomings of the 2300MHz band (higher frequency requires more towers and is less efficient than lower frequency bands); enticing customers to move from the existing operators and upgrade to 4G by making devices affordable; and becoming relevant for a larger segment of Indian customers who may be slow in migrating to 4G”. Overcoming those challenges may not be easy.

Source: LiveMint

Telecom manufacturing high on Prasad’s agenda

Policies that will boost telecom and electronics manufacturing in India are high on Communications and IT Minister Ravi Shankar Prasad’s first 100 days’ agenda.

While Kapil Sibal, who held the portfolio under the UPA dispensation, had also taken this as one of the key initiatives, proposals such as the preferential manufacturing access did not take off due to differences within the Government on implementing it.

According to top Government functionaries, Prasad now wants to take a fresh look at the issue and has asked the industry to come up with ideas on how local manufacturing can be made a reality. “The Minister met multinational mobile phone companies recently and asked them to give a list of things which the new Government can do to encourage them to set up factories in India,” the Government official told Business Line.

The previous Government had tried to bring in a number of policies to attract investments in the manufacturing sector. For example, it had announced incentive schemes for players for setting up semiconductor fabrication units.

However, these initiatives did not attract many new investors. In fact, decisions such as the tax notice on Nokia acted as a dampener. Nokia had to shift most of its manufacturing from the Sriperumbudur factory near Chennai to locations in other countries, including Vietnam.

When contacted, a Nokia spokesperson confirmed the meeting with Prasad. “Nokia confirms that it has started to meet high-level ministers of the new government. We welcome the opportunity to engage with the new government on matters important to the industry. We remain committed to getting the asset freeze on the Chennai facility lifted and to find an amicable resolution to the current tax disputes.”

The big worry for the Government is that India is a net importer of electronic products, which impacts the foreign exchange situation.

China factor

According to the Indian Cellular Association, imports of mobile phones are estimated to increase by whopping 61 per cent in 2014 to ₹56,300 crore compared with ₹34,950 crore in 2013. Total domestic production would have shrunk by nearly 15 per cent, at a time when the overall market is set to grow by 31.5 per cent. This, despite the fact that manufacturing in India is cheaper compared with China. Labour costs here are half the level of Shenzhen, the global hub of mobile manufacturing. But, China has rolled out the red carpet by giving huge tax breaks backed by investment friendly policies.

The key challenge for Prasad to counter China’s superiority in the region would be to get support from other Ministries such as Finance to give tax incentives and infrastructure support to make India an attractive destination.

Source: HBL

Sunil Dutt joins Reliance Jio as President

Former Managing Director of BlackBerry Sunil Dutt has joined Reliance Jio as President.

Dutt is an industry veteran with 27 years of extensive experience in the Indian mobile technology and telecom sector.

He had quit BlackBerry India last year at a time when the handset maker was in the process of rolling out its flagship product under the new Blackberry 10 series.

When contacted Dutt confirmed that he has joined the Mukesh Ambani-promoted company on Monday.

Dutt has earlier worked for Hewlett Packard India Sales Pte Ltd as President, Personal Systems Group, and was responsible for expanding the company’s business in the enterprise, mid-market and consumer space.

Prior to that, he worked in senior positions for companies like Samsung India Electronics Ltd, Nokia India Pte Ltd, Whirlpool of India Ltd, Wipro Ltd and Philips India.

Source: HBL

Government planning incentives for local telecom gearmakers

The government plans to offer a slew of incentives to local telecom gearmakers, including an interest-free deferred excise duty payout option over a 7-year span, export sops, 10-year tax holidays and a Rs 1,000-crore telecom innovation fund. The move aims at lending an impetus to domestic telecom manufacturing and reducing dependence on imported gear.

The 10-year tax holidays are proposed for domestic telecom product companies with units in special economic zones (SEZs), while the 10 per cent export incentives have been suggested to encourage domestic producers to manufacture security sensitive telecom products that will have to be locally sourced for government-funded telecom projects under the preferential market access (PMA) policy, according to an internal government presentation seen by ET.

The Rs 1,000-crore telecom innovation fund, which may progressively be scaled up to Rs 5,000 crore, is in the works to provide seed capital to local telecom start-ups. The fund is proposed to be registered under the Securities and Exchange Board of India's Alternative Investment Fund (AIF) regulations.

The telecom department is likely urge a trustee company, established under the Indian Trust Act of 1882, to operate the fund, the note shows. The government also plans to "delicence small chunks of spectrum" for eligible local telecom gear makers with the requisite IPRs to test and develop homegrown technologies. It is also likely to explore ways to reduce "high financing costs" and remove glitches in the "inverted duty structure on Information Technology Agreement (ITA) products triggered by dual use raw materials and components".

The latest overtures come amid expectations that the government will address the inverted duty structure jinx, under which finished goods are taxed at lower rates than the raw material. In fact, it is likely to do so in the next budget to boost manufacturing. The plan to ring in new incentives is aimed to complement the Telecom Regulatory Authority of India's target of local telecom gear makers meeting 80 per cent of India's telecom demand by 2020.

"A majority of network infrastructure equipment is imported" and "India is merely a screwdriver assembly operation for MNCs since very little value addition happens locally and the IPRs (intellectual property rights) reside with foreign companies," concedes the government in the internal presentation cited above.

The emphasis on developing a robust local telecom manufacturing ecosystem is also aimed at reining in "huge forex outflows and GDP losses" triggered by India's huge import dependence.

For instance, in 2012-13, India imported Rs 27,223 crore of telecom equipment (including handsets, components and telecom cables), according to data collated by the telecom department. DoT numbers further reveal that domestic telecom gear makers met merely 3 per cent of India's aggregate telecom demand of Rs 54,765 crore in 2009-10.

Source: TOI

Reliance Jio may use Indore, Coimbatore as launch sites for its 4G service

Reliance Jio Infocomm may start its much-awaited 4G service from smaller cities like Coimbatore and Indore, before ramping it up to the metro cities in stages, industry sources and analysts said.

The telecom unit of Reliance Industries is fast putting up critical infrastructure and conducting trials to bring in affordable handsets and devices before the rollout. "The company wants to launch its network through a tier-II city like Coimbatore and Indore and come to the metros later," a person familiar with Jio's plans told ET, a view backed up by some analysts the paper spoke to.

Jio is likely to have readied its circle headquarters across all the 22 telecom circles with a chief technology officer at each place, people familiar with the matter said. As reported earlier by ET, Jio was looking to fill up to 500 senior positions. It isn't clear how many of them have been filled up so far.

Jio owns airwaves in the 2300 MHz band in all the 22 circles since May 2010. Under the licensing conditions, it must roll out services by May 2015 — that is within five years of getting the licences. The company also bought airwaves in the 1800 MHz band in a government auction in February this year.

It plans to launch fourth-generation (4G) data services using the 2300 MHz band, or TD-LTE that allows high-speed data at much cheaper costs, along with voice over LTE (VoLTE) on the 1800 MHz band, or FDD LTE.

It is widely expected to launch initial services later this year, with some expecting as early as September, and ramp up the operations over the following months. However, Jio never commented on a timeline for its launch. It has been busy stitching up deals to share telecom infrastructure, including towers and optic fibre, with companies such as Bharti Airtel, Reliance Communications, Viom and American Tower Corp, besides setting up its own infrastructure.

Meanwhile, parent Reliance Industries said it would take control of media group Network18, which has a bouquet of news and general entertainment television channels, apart from an ecommerce website. Jio plans to leverage Network18 for its 4G offerings.

The people said Jio is likely to have successfully completed trials on Samsung Galaxy S4 mini handsets, which can be used for providing voice over LTE on 1800 MHz. Jio didn't respond to an email seeking comment. Samsung declined to comment.

In a report, Sunil Tirumalai, an analyst at brokerage firm Credit Suisse, said Jio and Samsung are working together to having a "range of handsets starting at $150 (Rs 8,900) at the time of launch".

The people familiar with the matter said Jio won't be subsidising the handsets through bundled offers, but wants to make sure affordable handsets are available in the market at the time that its services are launched. Handsets that support 4G are currently very expensive.

China's TCL Communication recently said it was preparing to launch its Alcatel-branded affordable 4G phablets in a tie up with Jio, but a deal hadn't been finalised. It said Alcatelbranded 4G dongles and smartphones are already in the testing phase with Jio.

Jio is also likely to have completed the installation of base stations across 11,000 towers, and the number is expected to go up to 40,000 by the year-end. A base station, or a cell site, sends and receives radio signals from a mobile phone. A large number of them put together form a cellular network. These cell sites are typically mounted on towers.

"The company has already connected the optic-fibre network to these 11,000 towers and another 35,000 units of base station units are ready for installation," one of the people said. He added that connecting these base stations to optical fibre is critical to the company's strategy of providing "fiber-to-home connectivity".

The telecom unit of Reliance Industries is trying to ready over 1,00,000 towers for a faster rollout of its services. It plans to lease around 70,000 of those and put up the rest on of its own. "RJIO is going with a full LTE network (with voice on VoLTE). The base stations are dual mode FDD+TD LTE base stations (i.e., two parallel networks in terms of capacity)," Tirumalai of Credit Suisse wrote in the note.

Source: ET

Reliance Jio signs tower sharing agreement with Ascend Telecom

A new month and a new tower sharing agreement from Reliance Jio Infocomm (RJIL), the data services venture of Reliance Industries. This time with New Silk Route-backed Ascend Telecom Infrastructure Pvt. Ltd.

As per the agreement, Reliance Jio will be using Ascend Telecom’s telecom tower infrastructure comprising of 4,500 towers across the country to launch its 4G services.

This is Reliance Jio’s seventh tower infrastructure sharing partnership in the country after signing similar deals with Tower Vision India last month, ATC India in April this year, Viom Networks and Bharti Infratel in March this year, Reliance Communications (RCOM) in June 2013 and its competitor Bharti Airtel in December 2013. Through these tie-ups, the company has access to around 194,500 towers across the country.

Last month, Reliance Jio Managing Director Sanjay Mashruwala had mentioned that they will be offering 4G services through a combination of towers they are renting from these partners and those that they are constructing on their own. It apparently plans to construct around 25,000-30,000 towers on its own.

Reliance Jio – Infotel Telecom merger: Reliance Jio Infocomm has also apparently informed the Department of Telecommunication (DoT) that it plans to merge its wholly-owned subsidiary Infotel Telecom with itself, reports The Economic Times. It said this merger will allow the company to offer national and international long distance services under a single licence.

Reliance Industries currently owns 98.9% stake in Infotel Telecom which currently has licenses to offer national long distance and international long distance services. For the financial year ended March 31, 2014 (FY14), Infotel Telecom posted total revenue of Rs 0.11 crore and a profit of Rs 0.01 crore.

A PTI report also suggests that RJIL has approached DoT to setup an international Internet services gateway in Mumbai and Chennai, which is apparently required to connect to overseas networks. Note that RIL had joined a consortium to set up a submarine cable system via the Bay of Bengal in April last year.

Last week, Reliance Industries had acquired Network18 and had received board approval to invest up to Rs 4,000 crore for the acquisition and make open offers post the acquisition. Read a detailed timeline on how Reliance Industries acquired Network18

Source: Medianama