Day 9: Total spectrum bid value remain at over Rs 1 lakh crore

Saturday, 14 March 2015 - 6:30am IST | Place: New Delhi | Agency: dna | From the print edition

On the ninth day of the spectrum auction, the total bid value remained over Rs 1 lakh crore as telecom companies (telcos) went after airwaves in the 800 Mega Hertz (MHz) band as they look to cash in from data consumption explosion projected by internet survey firms.
After 55 rounds of bidding, the government's provisional revenue earning on Friday on allocation of 86% of the 465 MHz spectrum in four bands put on the block was over Rs 1 lakh crore. This figure is very close to the record revenue of Rs 1.06 lakh crore earned by it in 2010.
The auction continued to see furious action in the 800 MHz band for the third day in a row. The demand for airwaves in this band in Andhra Pradesh (AP) circle on Friday saw a huge jump of 15% to Rs 541 crore per block from Rs 471 crore per block a day earlier.
G Krishna Kumar, Bangalore-based telecom consultant, said fierce bidding for airwaves in AP circle could be because it is one to the top five states in the country in terms of GDP and also one of the IT capitals.
Curiously, even Odisha and Madhya Pradesh (MP) saw some intense bidding on Friday with the price per block shooting up by 19% and 10% respectively. In Odisha, it moved up to Rs 22.32 crore per block from Rs 18.75 crore per block and in MP to Rs 266.50 crore per block from Rs 243.90 crore per block.
Spectrum price in Delhi also jumped by around 1% from Rs 885.95 crore per block to Rs 903.74 crore per block. Beside these circles, prices in the rest of 800 MHz band circles seems to have stabilised.
Prices of 900 MHz band spectrum has, more or less, stabilised with marginal price rise in a few circles like Assam, Maharashtra, Northeast and West Bengal circles.
Friday also saw demand for 1,800 MHz with upward price movement in Haryana, Himachal Pradesh, Kolkata and Odisha.
In the 2,100 MHz band, there were no bidder in Mumbai, Delhi and AP circles due to prohibitive reserve price per block in these circles, which was as high as Rs 3,315 crore (Delhi) per block and Rs 3,245 crore (Mumbai) per block. In this band, there was a nominal price rise in Assam, Northeast, Rajasthan and UP (west).
Krishna Kumar said the lacklustre demand for 2,100 MHz could be because only one slot had been put up for sale at very high reserve price. He believes this band could see some spectrum left unsold at the end of the auction. He expects the auction to conclude in a few days.
The auction has eight participants including Bharti, Vodafone, Idea, Uninor, Aircel, Tata Tele, Reliance Communication and Reliance Jio. The government said since there was still some more spectrum left to be sold, the bidding will continue today.
 

Spectrum bidding set to top Rs 1 lakh crore

Monday, 9 March 2015 - 6:30am IST | Place: New Delhi | Agency: dna

Bidding for spectrum by the telecom operators reached Rs 86,000 crore on the fourth day of the auction, surpassing the government's revenue expectation of Rs 82,000 crore, the rate at which the reserve price was fixed in the four bands.
By Saturday, the auction, that began on Wednesday, completed 24 bidding rounds with spectrum in 900 MHz band being most sought after by the telecom companies. In this band, Madhya Pradesh saw aggressive bidding with an increase of 15% from Day 3 to Day 4. Similarly, UP (East) saw the price per block go up from Rs 77 crore to Rs 88 crore, an increase of 17% at the end of the clock round 24.
After three days of lukewarm response in the 800 MHz band, action picked up on Day 4 with some bidders jumping into the fray for blocks in circles like Andhra Pradesh, Gujarat and others. Apparently, bidding in the 800 MHz band was keenly contested. For example, in Mumbai, from Day 3 to Day 4, the price per block went up from Rs 576 crore to Rs 691 crore.
Even in the 1800 MHz band, bidding commenced for blocks in Kolkata and Northeast circles even as demand for 2,100 MHz remained subdued for the fourth day with bidding seen only by three bidders in three circles of Assam, Northeast and Rajasthan. There were no takers for the 1800 MHz in both UP (East) and UP (West).
Analysts believe aggressive bidding by telcos is likely to see their debt levels shoot up considerably. Standard & Poor's (S&P) expects it to jump 18-20% from the current levels. G Krishna Kumar, a Bangalore-based telecom professional estimates the auction to push up the debts of the operators by 30-40%.
He believes Idea could have bid more aggressively as the spectrum that contributes around 70% to its revenues will expire later this year. He feels both Airtel and Vodafone too could fiercely bid for airwaves as roughly 50% of their revenues are tied to the spectrum that are expiring this year.
According to him, the average revenue per minute (ARPM) in India is roughly 35 paisa. "This means after the current auction, the operators will ask subscribers to pay at least 15% more," estimates Krishna Kumar.
He said India had to do lot of catching up in the data service segment, where huge potential still remains untapped. "Data usage per customer in India is roughly 60 megabytes (MB) per month while it is 700MB in the US. It is expected to touch 2 gigabyte (GB) by 2017, thanks to 4G. There is a big catch-up to be done in India," he said.
The government has put up 465 MHz of airwaves on the block for sale in four bands including 800 MHz, 900 MHz, 1,800 MHz and 2,100 MHz. In all, eight telcos are taking part in the bidding constituting Bharti Airtel, Vodafone, Idea, Tata Tele, Uninor, Reliance Jio, Reliance Communication and Aircel.
A large quantum of spectrum put up for auction are currently being held by Airtel, Vodafone, Idea Cellular and Reliance Telecom. While their licences are set to expire in 2015-16, Idea's nine, Airtel's six and seven each of Vodafone and Reliance Telecom are coming up for renewal. The government had raked in Rs 62,162 crore from the last spectrum auction held in February 2014.

Spectrum auction kicks off with a bang; bidding tops Rs 60,000 crore

Thursday, 5 March 2015 - 6:10am IST | Place: New Delhi | Agency: dna | From the print edition

The latest round of spectrum auction in four bands kicked off with a bang on Wednesday with the first day bidding crossing a whopping Rs 60,000 crore. Aggressive bidding was seen in the 900 megahertz (MHz) band.
"Going by the quotations on the first day the response was better than expected," telecom secretary, Rakesh Garg said.
"It (the first day of the auction) went off well with the bidding already reaching Rs 60,000 crore. There was aggressive bidding in the 900 MHz band, which is fast spreading to 1800 MHz and 2100 MHz. The bidding for 800 MHz airwaves was also good," he said.
The auction saw eight companies participating in the bidding with 385.75 megahertz (MHz) of telecom spectrum in four bands put on the block. These were Bharti, Vodafone, Idea, Aircel, Tata Tele, Reliance Communications, Reliance Jio and Telewings, who have deposited a total of Rs 20,435 crore earnest money.
The high collection of earnest deposit was itself an indication of aggressive bidding. The total airwaves up for bidding include 103.75 MHz in the 800 MHz band, 177.8 MHz in 900 MHz band, 99.2 MHz in 1,800 MHz band and 5 MHz in 2,100 MHz band.
G Krishna Kumar, a telecom professional from Bangalore, said aggressive bidding for airwaves will further hit the already stretched balance sheets of telecom companies and will push up tariff as increased costs will be passed on to the consumers.
He said that with subscriber base for most telcos' voice services already having topped, they will chase subscribers for data services, where a huge potential still remained untapped.
"Going forward, data is going to be their priority. They will have to be clever in providing their data-plans in a way that there is growth in the segment," he said.
The initial estimates of revenues, based on the reserve prices set by the government, to be earned by the government from selling the airwaves in different bands have been pegged at Rs 80,000 crore to Rs 1 lakh crore.
This is the highest ever revenue collected in any auction till now and will help the current government to easily meet its fiscal deficit target of 4.1% of the GDP in this fiscal. In the last auction, which was held in February last year, the government raked in Rs 62,162 crore.
The auction is expected to carry on for several weeks, including Thursday, which is a public holiday. In the past too, bidding for spectrum has lasted for longs hours for weeks.
At the outset, the latest round of the auction was expected to be of fierce bidding with incumbents Bharti and Vodafone trying to garner as much spectrum as possible to keep their lead in the voice services market and expand the data services segment. Mukesh Ambani's Reliance Communications, which is yet to launch its services, is expected to up the competitive heat by going aggressively after more airwaves to take on established players.
Many of the telcos' licences will be coming up for renewal in 2015-16. These include nine of Idea, six of Airtel and seven each of Vodafone and Reliance.
Abiding the court order, this time the government will not be releasing information on individual companies or the winners of spectrum until the end of the auction.

Eight telcos to bid for spectrum, Videocon, Sistema opts out

Eight telcos to bid for spectrum, Videocon, Sistema opts out
Tuesday, 17 February 2015 - 6:20am IST | Place: New Delhi | Agency: dna | From the print edition

• The spectrum of March 4 envinced active interest with eight of the 10 private telecom operators having submitted their applications on Monday, the last date for expressing intent.

  The spectrum of March 4 envinced active interest with eight of the 10 private telecom operators having submitted their applications on Monday, the last date for expressing intent.
  The auction will generate revenues close to around Rs 80,000 crore for the government which will help meeting its fiscal deficit target of 4.1% of the GDP.
  All major players including Airtel, Vodafone, Idea, RCom, Reliance Jio, Uninor, Aircel and Tata Teleservices have submitted their forms. Sistema Shyam Teleservices Ltd (SSTL) and Videocon, however, have decided to opt out of it.
  The combined market share of the two players would be less than 2% of the total mobile services market.
  G Krishna Kumar, telecom professional based in Bangalore, said their absence in the auction would not be of much consequence.
  "While, ideally, we would expect all the existing providers to participate in the auction process, it is perfectly fine for a few to drop out. In the current scenario, Videocon and Sistema together account for only about 1.5% of the wireless subscribers in the country," he said,
  SSTL, which operates its services in the 800 megahertz (MHz) band, has decided to keep out of bidding because of steep reserve price fixed and its pending complaint against Department of Telecom (DoT) with the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) for making the spectrum allocated to it in the 2013 auction contiguous.
  "SSTL has consistently maintained that the pricing of 800 MHz spectrum at Rs 3646 crore per MHz, is way out of line and does not merit a strong business case for buying additional spectrum. The company continues to maintain that such pricing does not take into account the realities of the prevailing ecosystem within the band," said the statement issued by the company.
  The company currently holds 3.75 MHz spectrum in nine circles including Delhi, Rajasthan, Gujarat, Karnataka, Kerala, Tamil Nadu, Uttar Pradesh (west), West Bengal and Kolkata. A company spokesperson said the company was waiting for the issue of non-contiguous spectrum to be resolved in TDSAT, whose next hearing was on February 18.
  In the auction held in 2013, SSTL was the only bidder for the CDMA spectrum.
  "Since SSTL was the sole bidder during the said (2013) auction and there is no other successful operator for rearrangement of frequencies, it is incumbent upon DoT to rearrange/reassign the frequency to make the spectrum allotted to SSTL contiguous," it noted in its statement.
  The government is offering 385.75 MHz spectrum in four bands including 800, 900, 1800 and 2100.
  Airtel, Vodafone, Idea Cellular and Reliance Telecom, whose licenses will be expiring in the current fiscal, are expected to be aggressively bidding for spectrum to win it back

Need to redesign structure for skilling India

 February 2, 2015 12:36 am Financial Express FE-Reflect FE Columnist

The union minister of state (independent charge) for skill development, Rajiv Pratap Rudy, recently said that India’s skilled workforce is 2%, compared to over 75% in all major economies. In this backdrop, the government us working on a new skill development policy to address shortcomings of the existing policy. Although skill development can improve “employment-readiness”, a sustainable job creation platform is urgently needed.

The job market is a factor of demand and supply. Demand-supply mismatch here is one of the biggest challenges India faces. A report indicates that there is demand in the job market, but unavailability of the right talent is costing the economy R53,000 crore.
Although India produces lakhs of graduates, the National Employability Report 2014 states that employability is a challenge with only 18.09% of this pool getting jobs. People taking up jobs for which they are overqualified amplifies the demand-supply mismatch.
The lack of skilled people is an overarching challenge, prevalent across industries, be it manufacturing or IT. We need a three-pronged approach to address the demand-supply challenge.
We need a strong vocational education and training system, the foundation of which must be set at the primary school level. We should, perhaps, adopt the German Duales Ausbildungssystem or dual system of vocational education and training (DSVET). In fact, China too has developed its own vocational education is introduced at the primary school with students in the age group of 12-14 years. In India, in addition to specific skills, communication, logical reasoning and, most importantly, cognitive skills must be taught to the students.
The prime minister’s idea of using railway stations for imparting skill development training in rural areas must be lauded. Perhaps, this should be extended and existing infrastructure in government offices like post offices, BSNL, and even colleges and schools should be used for vocational training. The Digital India campaign can help in using ICT as an enabler for skill development, evaluation and monitoring of students. With advancement in ICT, Massive Open Online Courses (MOOC) platform can be used effectively to impart vocational training.
Vocational school teachers in China are mandated to spend one month in the industry every year. This is an excellent mechanism to ensure the teachers are up-to-speed in terms of industry and technology. Can we implement this in India across disciplines/courses? This can be achieved only if we have a strong industry-academia relationship. How about getting experienced professionals from different sectors to train the teachers? Perhaps, the companies can utilise their CSR spend to provide experienced manpower for training .
Also, industry bodies should drive the syllabus (both theory and practical training). The government could invite experienced and retired professionals to contribute in developing and updating the syllabus. Introducing mandatory industrial training as part of curriculum will certainly help students’ employability prospects.
The government’s plan to start an university for skilling can wait. There are quite a few disparate skill development efforts carried out in the country. We already have thousands of ITIs, engineering and diploma colleges. In addition, we have the National Skill Development Corporation (NSDC) and the National Vocational Education Qualifications Framework (NVEQF) addressing some of the skill gaps. There are quite a few NGOs and private players offering skill development/ entrepreneurship training. Instead of creating new organisations/systems, it makes sense to streamline and rationalise existing systems. The autonomous body NSDA (National Skill Development Authority) in the Skill Development ministry should embark on rationalisation drive.
Finally, the government should work with the Industry bodies and identify top 5 sectors and provide the necessary push for implementation. Based on the outcome of these skill development programs, additional sectors can be added. Can the government publish quarterly data on the exact number of people reskilled, job positions filled and a view of the demand for at least 12-18 months?
An AICTE report has identified about 30 different skill areas and possible requirement by 2022. This can be a good starting point to prioritise the areas/sectors where the government’s attention is needed. As per the report, automotive, healthcare, organised retail and IT/electronics are expected to generate millions of jobs.
How about focusing on agriculture for skill development, productivity improvements and innovation? President Obama during his speech in New Delhi highlighted the importance of agricultural productivity and the cascading positive effect on India’s economy.
It is intriguing that 60% of India’s population depends of agriculture, but accounts for only 14% of the GDP. India’s premier technical institutions should be accountable for providing solutions to this sector.
Although prime minister’s Make-in-India initiative can certainly spur new jobs and also in reskilling, we need a balanced approach between manufacturing and agriculture. We don’t want all our farmers to take up non-farm jobs.
Summing up, the success of skill development will be measured based on jobs created. Prioritising sectors for skill development and rationalising existing systems to create a robust demand-supply matching and monitoring system is urgently needed. Although the new skill development policy is welcome, implementation will hold the key.
By G Krishna Kumar
The author is adviser, Centre for Educational and Social Studies, Bangalore. Views are personal

Online stores under DoT scanner

Some online adult toys and  adult lifestyle stores have come under the scanner of the Department of Telecom (DoT), which wants to regulate such webstores under section 67, 67A and 67B of the Information Technology (IT) Act, 2008 for "selling and promoting alleged objectionable products illegally".
A telecom department note mentions online stores like flipkart, Imbesharam.com, thatspersonal.com and OhMySecret.com, which, it feels, are violating rules under the IT Act.
It also refers the names of the CEOs of these portal including Sachin Bansal (flipkart), Raj Armani (IMbesharam), Samir Saraiya (thatspersonal.com) and Vinodh Reddy (OhMySecrets.com).
There are "few online selling websites, which are openly promoting and selling alleged objectionable products illegally," says the note referring to these websites.
The DoT said this was brought to its notice through a letter from the ministry of information and broadcasting and a complaint by one Harit Kumar to the Delhi police, alleging objectionable content being shown on websites.
The other two portals are also explicitly adult stores but it is not clear why flipkart has been mentioned along with them. None of the CEOs were available for comments.
G Krishna Kumar, an IT professional from Bengaluru, said they could have come to the government's notice as they don't have checks and balances that such sites require for their access.
He said measures such as giving access to only those who register their age as 18 years and above would probably satisfy the regulating agencies.
"For adult content sites, it must be mandatory to have a login (assuming that the individual will provide the correct details). It finally depends on how truthful the individual is," said Krishna Kumar.
Incidentally, Facebook requires a person creating a login ID to be at least 13 years old while Google has age requirements as defined by individual countries. Youtube, for example, displays a warning screen when adult content appears, saying "only users who are 18 or older can watch it".

Is your mobile certified for SAR radiation?

Sunday, 11 January 2015 - 7:20am IST | Place: New Delhi | Agency: dna

A letter written by India's only authorised lab and certifier of specified absorption rate (SAR) of radiation in a mobile handset to the customs chief in New Delhi brings out rampant misuse and violation of government rules on the same.
Bharat B Jain, chief executive officer (CEO) of BNNSPEAG Test and Calibration Laboratory India Pvt Ltd, told dna he has come across some instances of fake SAR conformance certificates being issued by a Delhi-based entity AB Mobile Standards India Pvt Ltd and has brought it to the notice of the customs.
"This forging of SAR compliance certificate is not only causing a revenue loss to the test lab but also resulting in unchecked mobile phone radiation to general public," Jain wrote in his letter to the Commissioner of Customs Bhushan Kumar Bansal.
What has surprised Jain is that the customs has cleared mobile handsets imports on production of these forged documents. As evidence, he has provided a copy of SAR conformance certificate issued to Maxx MobilE Communications Limited's MX425e model by AB Mobile. The model was made manufactured by United Creation Technology Co Ltd.
"It has come to our notice that under-mentioned organisation (AB Mobile Standards India Pvt Ltd) is giving forged SAR certificates to various mobile manufacturers and importers, who are submitting these to customs for clearance of these phone by illegally using ILAC (International Lab Accreditation) symbol," he states in the letter.
And while Jain is still awaiting response from the customs authority, ILAC – the international body of which his company is a signatory – has already addressed his concerns.
An e-mail sent to him by Sharon Kelly of ILAC has verified that AB Mobile was not an ILAC signatory.
"AB Mobile Standards India is not authorised to use the ILAC MRA Mark as shown on the SAR conformance certificate provided (to us)," she wrote to Jain.
ILAC, which is a global mobile testing and certification body, has taken the matter further and will be carrying out a probe to check whether testing by AB Mobile was done at an accredited laboratory.
"However, this would need to be confirmed with AB Mobile Standards and CNAS (China National Accreditation Service for Conformity Assessment), the accreditation body in China that is a signatory to the ILAC MRA because the conformance certificate indicates the laboratory used was based in China," she assured Jain in her email.
ILAC has said it will use the evidence given by Jain to contact AB Mobile Standards and advise them against inappropriate use of the ILAC MRA Mark.
G Krishna Kumar, telecom professional from Bangalore, said even though India has set guidelines on acceptable SAR level for mobile phones sold in the country, its implementation was a challenge.
"It is worthwhile to note that SAR value by itself does not guarantee that the phone is safe to be used continuously for hours. Data suggests that a SAR value of 1.6 W/kg (watt per kilogram) means that the phone can safely be used for about 18-20 minutes of continuous talking (with phone held against the ear) in a day," he said.
According to him, the government or the phone makers or the telcos needs to educate general public on these aspects.
He said the government should mandate the over 150 mobile phone makers to provide the radiation details for all phone models launched in India over the last one year. "This should be available both online and in all the retail outlets," said Krishna Kumar.