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DTH Broadcast cleared with riders, 49% foreign participation allowed The Cabinet cleared direct-to-home (DTH) broadcasting service policy. The Information and Broadcasting ministry has issued guidelines for the issue of an unlimited number of DTH licences. The major highlights are as follows:
DTH facility for other modes such as voice, fax, data and internet would be allowed under separate licences for value added services. Formal notification of the above guidelines are awaited. Source: The Economic Times, November 3, 2000 Gupta becomes IT controller today Mr. Kailash Nath Gupta, the former executive director of Center for Development of Telematics (C-DOT), was yesterday appointed as the controller under the Information Technology Act, 2000. The first task Mr. Gupta has to address is to issue licences to Certifying Authorities (CAs) across the country. Mr. Gupta said that the Certifying Authorities will facilitate to provide legal validity to e-transactions and there will be no restrictions on them as long as they fulfil certain basic criteria. He also said that while the controller will prescribe the type, format and manner of digital signatures to be certified by the CAs, they will be free to function independently with their clientele. The controller will then slip into a supervisory role. Source: The Economic Times, November 1, 2000 Entertainment gets Industry status The Minister for Information and Broadcasting on October the 18, 2000 made an announcement, at Economic Editors Conference in the Capital notifying the entertainment sector an (including films) as industryannouncement . According to Press reports the Finance ministry in a sequel to the Ministers has put its seal on industry status for the film industry through a notification under the IDBI Act, 1964. According to Press reports dated October exploring the 22 2000, the Reserve Bank of India, is also possibility of bankable schemes for the entertainment industry and proposes to hold detailed consultations with commercial banks in order to consider the possible mechanisms that could help the flow of institutional credit into the entertainment businessthe RBI . The Press reports further add that will be considering the entire gamut of the entertainment industry and not just films. Source: Economic Times October 22, 2000 Communications minister hints at merger of telecom, IT and I&B ministries TVilas Paswan, on October 20, 2000 hinted at the possible merger of the he communications minister Mr. Ram ministries of Information and Technology (IT), Information and Broadcasting (I&B) and the Ministry of Communications. The group of ministers headed by the Finance Minister were unable to arrive at a decision after a lengthy meeting on October 20,2000. In the interim, Mr. Paswan announced that the issue is expected to be resolved by the time the Communications Bill is tabled in the winters session of Parliament. Source: Times of India, October 21, 2000 Entertainment Sector accorded "Industry" status The Minister for Information and Broadcasting, Ms Sushma Swaraj announced that the Government has issued a notification according "industry" status to the Entertainment Sector, at the Economic Editors Conference in New Delhi on October 18th. This said notification (issued by the Finance Ministry under the IDBI Act) recognises film-making as " an approved industrial activity." This is intended to help the film industry avail of bank finance, insurance and rationalise its taxes. It is also reported that the Information and Broadcasting Ministry would take a decision regarding the modalities of direct-to-home (DTH) TV service within a fortnight. Among other issues being deliberated on by the ministry are the Draft convergence bill, allowing foreign equity in print media and implementation of the amendments to the Cable Network Regulations Act. It is also anticipated that the regulator appointed under the Convergence Act would then look into a host of issues inter alia vulgarity, gambling and piracy. Formal communication from the Government is awaited. Source: The Economic Times, October 19, 2000 TRAI to issue recommendations for 4th
Cellular Operator by November; recommends reductions in VSAT licence fees
Source: The Economic Times, October 19, 2000 FDI cap in telecom services may rise to 74%, Maran favors 100% The Foreign Direct Investment (FDI) cap for the telecom services sector is likely to be increased from the existing limit of 49% to 74% in the equity share capital of the Indian entity. The Union telecommunications minister Ram Vilas Paswan agreed to reconsider the issue at the last FDI meeting of the Group of Ministers (GoM). The Industry Ministry is also pushing for 100% FDI in telecom services sector. The industry ministry also pointed out to the telecommunications minister that the sectoral cap had already been breached through holdings by foreign institutional investors, the preferential allotment route and the Joint Venture route because the domestic partners are unable to bring in the requisite equity. This in turn is compromising the quality of services and as a result many foreign investors are threatening to withdraw their investments. Hence, the industry minister argued in favor of 100% FDI in the telecom services sector, subject to a case-by-case approval. Source: The Economic Times, September 13, 2000 CCEA decides to end VSNL monopoly in 2002 The Cabinet Committee on Economic Affairs (CCEA) has decided to advance the deadline for ending VSNL’s monopoly over international voice traffic from 2004 to April 2002. According to the proposal cleared by CCEA, the four-part compensation package to be paid to the company will include giving government’s earnings between 2004 and 2006 by way of revenue share paid by the new international operators to VSNL. The government will also waive fee for VSNL’s entry into national long distance operation for a period of 5 years beginning April 2001. VSNL would thus get a refund of the Rs 100 crore entry fee and get a waiver on the Rs 400 crore bank guarantee. It was also decided that the licence fee by way of revenue sharing for national long distance will be refunded. The government has also decided that it may return the 10 per cent revenue share that VSNL would pay the government for providing NLD services. VSNL will also be turned into a national Internet Service Provider and the government has decided to grant it category A ISP licence. Source: Business Standard, September 7, 2000 100% Foreign Direct Investments In ISPs The Union Cabinet has permitted 100% foreign direct investment
in Internet Service Providers (without gateways through satellite connections
or submarine landing stations) and in infrastructure providers providing
cable networks, e-mail and voice mail. An official communication from
the Government 17 ISPs get in-principle clearance for international gateways The Department of Telecommunications (DoT) has granted 17 Internet Service Providers (ISPs) in-principle clearance for setting up international gateways. Data Access, Internet Promoters, STPI, Jain Studios, In Tech Net, Direct Internet, Dishnet and Satyam Infoway are some of the companies that have been granted in-principle clearances. DoT will award final licences to these companies once they get frequency clearances from the wireless planning cell (WPC) for using the spectrum. In December, the government permitted ISPs to use foreign satellites for international connectivity. The ISPs can use both the C band and Ku band for carrying Internet traffic. However, ISPs are not allowed to set up international gateways using submarine cables and have to go through VSNL to use submarine cables for international connectivity. Source: The Economic Times, August 10, 2000 Cell Industry valued at $ 5.4 bn The Indian cellular service industry has been valued at $5.4 billion (about Rs 23,520 crore) according to a still unreleased report by international consultancy Frost & Sullivan. The report, ‘Valuation of Indian Cellular Services Operators’, estimates the cellular industry’s accumulated losses at $805 million (about Rs 3,506 crore) at the end of 1999-2000. According to the report, with accumulated losses of $690 million (about Rs 3,005 crore), the circle operators account for a majority of the losses incurred by the industry. The metro operators, especially, the Mumbai and Delhi operators are estimated to have covered-up a part of their losses in the last fiscal. Source: Business Standard, August 10, 2000 NLD operators not allowed to carry intra-state STD traffic: disapproval from the minister of state for communication, supported by the PMO The Minister of state for communications, M.Sikdar disapproved the telecom commission's decision of not allowing the national long distance (NLD) service providers to carry intra-state STD traffic. The Prime Minister Office supports his views and has set up a committee which will review the telecom Commission's decision in its first meeting on August 10. According to the Minister, the NLD operators should be allowed to carry intra-circle traffic, and in order to compensate the basic service providers, they can be allowed to provide mobile telephony using wireless in local loop system (WLL). Source: The Economic times, August 8, 2000 CAG seeks to audit accounts of private telecoms Comptroller and Auditor General has approached the government seeking permission to audit account of private telecom operators as these firms have to share revenue with the government with the change over from licence fee to the revenue sharing system. TRAI had recommended recently 17% revenue share for the cellular industry and 15% (including universal service obligation) for national long distance (NLD) which is to be opened up by August 15. TRAI has not made any recommendation on the revenue share of basic service operators yet. Although Cellular and Basic companies have been sharing 15 % revenue with the government, their lobbies have taken diametrically opposite positions on the audit issue. Association of Basic Telecom Operators (ABTO) said it would be against any audit whereas the Cellular Operators Association of India (COAI) has no problem with it. Auditing, according to Official sources, has become necessary to make the government believe revenue calculations of the private players without cross-checking. Source: Business Times, August 8, 2000 VSNL offered freebies for giving up monopoly on global telephony Government wants to make global telephony competitive The Government, which has indicated an end to Videsh Sanchar Nigam Ltd’s (VSNL) monopoly over international telephony before the scheduled 2004 deadline, has kicked-off an exercise to find ways in which the company could be compensated. The measures adopted by the Government include allowing VSNL free entry (waiving the Rs. 500 crore entry fee) into domestic long distance, waiving revenue sharing in long distance for 2 years and issuing the telecom giant a national internet service provider (ISP) licence. Senior Department of Telecom (DoT) officials said that the government has been considering an end to VSNL’s monopoly before 2004 to allow competition but this would have to be done only after the finalization of a compensation package. The decision to compensate the company is because of the fact that 47 per cent of the shareholding of the company is private and foreign investors through two GDR issues hold a bulk of this. These investors had entered the company on the basis of the monopoly status that it enjoyed till 2004 and a change in this would drastically alter the fundamentals of the company. The government is already working on a plan to bring down its holding in VSNL below 51 per cent. The issue had been discussed at the Cabinet Committee on Disinvestment recently but was deferred. It is learnt that a package is worked out to see how the government stake can come down below 51 per cent. The government is keen to make international telephony competitive since tariffs in India are still very high, among the highest in the world, and there is tremendous pressure from other countries to bring these down. VSNL’s monopoly over Internet has already been taken away when in early-1999, private ISPs were awarded licences. The government then allowed private ISPs to set up satellite linked Internet gateways and has now even allowed them to set up submarine cable linked gateways. Source: The Economic Times, August 2, 2000 VSNL's exclusive bandwidth deal with FLAG to stay The Government is not pressing VSNL to end its exclusive arrangement with FLAG Telecom, but has instead asked VSNL to ensure that it provides bandwidth within seven days of demand being put up. Currently VSNL has sole rights to sell bandwidth in India, which it has been sourcing from the FLAG network. According to the official of the DoT, the issue is not of ending the exclusivity agreement which has been entered between the two parties. The aim is to ensure that bandwidth is made available. The DoT has asked VSNL that it would have to move to providing bandwidth in seven days, and then 24 hours. Source: The Economic Times, August 2, 2000 The Satellite uplinking policy in place The Government has put in place a liberalized satellite uplinking policy. According to the new policy, any Indian company, not necessarily a broadcaster, can set up an uplinking hub, provided its foreign holding doesn’t exceed 49% (including non-resident Indians and overseas corporate bodies), and provided it adheres to Indian broadcasting codes. TV channels, both Indian channels and permitted foreign channels, can uplink from this hub. Wholly Indian news agencies can also uplink from such hubs. Source: The Economic Times, July 27, 2000 Cabinet clears uplinking policy, railways Telecom Company The Union Cabinet cleared the uplinking policy with the object of creating a nationwide broadband telecom and multimedia network to supplement the national telecom infrastructure. According to the parliamentary affairs minister, Mr. Pramod Mahajan, the uplinking policy will be placed before the parliament by the information and broadcasting minister Mr. Arun Jaitley. Under the existing policy, broadcasting companies with a foreign equity holding of more than 20% are not allowed to uplink from the country. This condition is likely to be relaxed slightly. The Cabinet also approved the establishment of a Broadband Telecom Multimedia Corporation of Indian Railways under the Indian companies Act, 1956. This will be a Delhi based Government company with seed capital of Rs. 15 crore and authorized capital of Rs. 1000 crore. The railways right of the way existing optic fibre network and microwave assets will be independently valued and then transferred to the corporation on a long term lease. Source: The Economic Times, July 26, 2000 The following article appeared in the, "Business Standard", dated July 3, 2000. This would help as a link to the article above. Uplinking terms may be relaxed A group of ministers, headed by home minister L K Advani, has now okayed a proposal to allow all Indian news agencies with management control lying with Indians to uplink directly to a satellite bypassing the facility offered by the state-owned Videsh Sanchar Nigam Ltd. ("VSNL"). This decision, once approved by the Cabinet, will benefit news agencies, which have to use uplinking facilities from India to send news feeds to various customers, including broadcasters. In further liberalisation of the process of uplinking TV signals from India, the GoM has also approved a proposal to allow non-broadcasting companies to set up uplinking hubs in the country and lease out the service to interested organizations on uplinking hubs. However the same would be subject to the 49% sectoral cap on foreign holding in telecom services, according to the sources in the GoM. At present, only broadcasters, with a maximum 20% foreign stake, are allowed to uplink directly, bypassing the VSNL. In 1998, the government had given the go-ahead to private Indian satellite channels to uplink from India using the VSNL facilities. Subsequently, further liberalisation took place and the channels were allowed to bypass VSNL for uplinking purpose and broadcasters like Sun TV and Enaadu TV now uplink directly from India. Source: Business Standard, July 3, 2000 TRAI wants cellular telephone companies to pay 17% as yearly licence fee The Telecom Regulatory Authority of India (TRAI) has worked out the revenue sharing formula between cellular operators and the Department of Telecommunications (DoT). The TRAI has recommended that mobile phone service providers pay 17% of their annual revenue to DoT as licence fee. It is expected that both sides would accept the TRAI recommendation. The DoT officials maintained that 17% of the revenue as licence fee was on a lower side. However, TRAI has stated that the cellular mobile service providers in Jammu & Kashmir and Andaman & Nicobar should pay only 10% of the revenue. Currently there are no service providers in these two circles. TRAI has also recommended that the fourth operator in a circle should be selected through bidding process. While there are already two operators in each circle, the Department of Telecom Services (DTS) and Mahanagar Telephone Nigam Limited (MTNL) would be the third operator. Source: The Economic Times, July 11, 2000 TRAI unveils quality norms for phone services The Telecom Regulatory Authority of India (TRAI) announced the standards of quality of services for basic and cellular mobile services. The 'Quality of services of basic and cellular mobile telephone services Regulations 2000, require the basic telecom operator to provide new telephone connections to subscribers within 21 days of registration, 85% of the fault repairs to be fixed within 48 hours and a call completion rate of 55%. For cellular mobile services, it envisages the fault incidence rate to be below 3% and 98% of the calls to be cleared within 48 hours and a call success rate of 98%. The TRAI Chairman also said that there will be no penalties for non-compliance of quality standards, initially. TRAI has also announced parameters to be achieved over the next four years. TRAI would submit final recommendations with regard to Universal Service Obligation (USO) in next 8-10 weeks. Source: The Economic Times, July 6, 2000 Plan panel favours free Internet telephony The Planning Commission has recommended the opening up of Internet telephony for the optimum use of resources and low cost services. It further states that with the convergence of technologies, service segmentation and a separate licence for each service becomes redundant and works instead as artificial barriers. It recommends a single licence for all telecom services and evolving of a common revenue share formula. The Planning Commission is against competitive bidding for the award of national long-distance (NLD) licences, as this will restrict the number of players. It suggests a one-time entry fee and no restriction on the number of NLD operators. The Department of Telecommunications (DoT) has been known to be opposed to this idea. Source: The Economic Times, July 6, 2000 MTNL allowed to give cheaper cell services, but with riders According to TRAI, Mahanagar Telephone Nigam Limited (MTNL) will be allowed to provide cellular phone service at lower tariffs on the condition that it was not cross subsidized by basic telecom operations. All service providers will be able to fix tariff depending upon their cost structure. Source: The Economic Times, July 6, 2000 TRAI asks MTNL to form separate company for cell services The Telecom Regulatory Authority of India (TRAI) has asked Mahanagar Telephone Nigam Ltd. to form a separate company for its cellular mobile services (to be launched in October) to ensure a level playing field with the private players. This is mainly to provide and ensure a level playing field with the private players, cross-subsidize them of the cellular services with the basic services. However, MTNL director (finance) S Sundresan said there is no question of forming a separate company for cellular services and that the licence issued to MTNL for operating cellular services is not transferable to any other company. Therefore, legally it is not possible to form a separate company. Source: The Economic Times, July 4, 2000 Basic services providers like fixed revenue sharing: TRAI In an open house discussion, relating to fixed service providers", the chairman of TRAI stated that basic telephone service providers prefer to have entry through bidding and a fixed revenue sharing system. The Chairman also felt that an oligopolistic structure should be adopted to promote competition and increase teledensity. Source: The Economic Times, July 4, 2000 National long-distance service rules to be out in a week: Paswan The communications minister Mr. Ram Vilas Paswan said that the guidelines for opening national long distance (NLD) services for competition would be formulated within a week. Mr. Paswan also said that the ministry is seriously looking at opening the International long distance market to players other than VSNL before 2004. As this would involve national security issues, the proposal would need approval from the cabinet. Source: The Economic Times, July 4, 2000 Uplinking terms may be relaxed A group of ministers, headed by home minister L K Advani, has now okayed a proposal to allow all Indian news agencies with management control lying with Indians to uplink directly to a satellite bypassing the facility offered by the state-owned Videsh Sanchar Nigam Ltd. ("VSNL"). This decision, once approved by the Cabinet, will benefit news agencies, which have to use uplinking facilities from India to send news feeds to various customers, including broadcasters. In further liberalisation of the process of uplinking TV signals from India, the GoM has also approved a proposal to allow non-broadcasting companies to set up uplinking hubs in the country and lease out the service to interested organizations on uplinking hubs. However the same would be subject to the 49% sectoral cap on foreign holding in telecom services, according to the sources in the GoM. At present, only broadcasters, with a maximum 20% foreign stake, are allowed to uplink directly, bypassing the VSNL. In 1998, the government had given the go-ahead to private Indian satellite channels to uplink from India using the VSNL facilities. Subsequently, further liberalisation took place and the channels were allowed to bypass VSNL for uplinking purpose and broadcasters like Sun TV and Enaadu TV now uplink directly from India. Source: Business Standard, July 3, 2000 DTS to be party to bandwidth pact According to sources, the Telecom Commission has asked VSNL and the International submarine cable carrier, FLAG, to get into a tripartite agreement with the Department of Telecom Services (DTS). The same is to resolve the issue pertaining to the exclusive agreement signed between the FLAG and VSNL for providing the international bandwidth in the country, which prohibits FLAG from selling extra cable capacity directly to the private ISPs. Most of FLAG's cable capacity is lying idle as VSNL meets its requirement from the cheap SEA ME WE 3. The Telecom Commission has suggested a new agreement whereby FLAG could provide cable to private ISPs, with the DTS providing leased lines for the domestic node. It has been suggested that FLAG could pay VSNL, a percentage of commission, for permitting FLAG to supply cable to private operators. Source: Business Standard, July 3, 2000 Furtive phone conversations on the net? May soon be legal The draft Information, Communication and Entertainment (ICE) Act of India, 2000, seeks to remove the ban on Internet telephony. At present, Internet telephony is not permitted by the Government as the same bypasses the exchanges set up by the Department of Telecom Services (DTS), Videsh Sanchar Nigam Ltd. (VSNL) and private basic telecom service providers and results in revenue loss to these entities. According to the sources, the draft ICE Act envisages to remove the ban on Internet protocol (IP) telephony and voice over IP and the transmission of voice over public Internet will be permitted. Source: The Economic Times, June 20, 2000 IT Bill, 4 others get President's approval Five Bills were passed by the Parliament yesterday, including the IT Bill, are now closer to becoming law with the President and K R Narayan giving assent to them. With the assent of the President, these Bills can now be notified in the Gazette of India as Acts of Parliament. The IT Act, 2000 seeks to amend existing laws in India to facilitate e-commerce and provide a legal framework for electronic records and digital signatures. This will allow the conclusion of contracts and creation of rights and obligations through the electronic medium. Source: The Economic Times, June 20, 2000 TRAI, DoT differ again, over fibre optics now The Telecom Regulatory Authority of India (TRAI) has recommended that the Government should not levy licence fees on Infrastructure providers who provide access to broadband networks. TRAI has argued that providers of infrastructure such as fibre optic networks are not telecom service providers under the Indian Telegraph Act. The DoT has argued in favour levying a licence fee of 15% of revenue in its comments to the TRAI and also favoured the amending the Indian Telegraph Act, so that infrastructure providers can be classified as telecom service providers. Source: The Economic Times, June 16, 2000 The ICE Authority of India (ICEAI) to closely monitor ICE space The draft Information, Communication and Entertainment (ICE) Bill 2000 proposes to vest the ICE Authority of India (ICEAI) with significant powers presently enjoyed by the Dept. of Telecommunications (DoT), making ICEAI a more powerful body than the Telecom Regulatory Authority of India (TRAI). The Bill empowers the ICEAI among other things to:
The Bill will incorporate the TRAI Act 1997 and the TRAI Amendment Bill 2000. Source: The Economic Times, June 15 2000 TRAI moots 4 private companies in long – distance telephony Among the final recommendations made by the TRAI, regarding the opening up of the National Long Distance Sector are the following: -
Source: The Economic Times, June 15 2000 Mahanagar Telephone Nigam Ltd. (MTNL), invited to join CellularOperators Association of India (COAI) The Cellular Operators Association of India (COAI) after a long fight to bar MTNL’s entry into cellular services, in May this year, decided to invite MTNL to join it. MTNL’s entry had been opposed by private cellular operators, supported by the COAI on the pretext of ensuring a level playing field. The litigation came to an end in August last year when the private operators were allowed to shift to revenue sharing from fixed license fees. MTNL plans to offer GSM based cellular services in Delhi and Mumbai, later this year, at a possibly lower tariff than the existing cellular operators. It has chosen the Indian telephone Industries (ITI) and Lucent Technologies as the equipment supplier, and intends to build up a subscriber base of 2.5 lakh each over a 3 year period. Source: The Economic Times, June 15 2000 Foreign Direct Investment Norms Further Liberalized The Union Cabinet has further liberalized the Foreign Direct Investment (FDI) Norms in the E-commerce sector to permit 100% only in the Business to Business segment. However atleast 26 per cent of the equity will have to be divested to the Indian public with 5 years of investment. Source: Business Standard, June 13, 2000. The Fali Nariman Committee, which was set, up to draft the Communications Bill, is presently studying a set of proposals for setting up independent carriage and content bureaus. There are to be 3 authorities under the Information, Communication and Entertainment ‘ICE’ Authority. The Spectrum manager – who will allocate and assign frequency and bandwidth resources to private parties by auction. The Carriage bureau – who will be the TRAI The Contents bureau – who will be responsible for licensing & broadcasting The other proposals under consideration by the Fali Nariman committee comprising of the secretaries of the Ministries of Information & Broadcasting, Information Technology and the Department of Telecom are that the ICE Authority :-
The Bill is proposed to be tabled in Parliament during the Monsoon session. Source: Business Standard, June 12, 2000. Sify does it again, acquires 25% in Cricinfo, pegs total value at Rs. 640 cr Satyam Infoway has bought 25% in Cricinfo, the London based owners of Cricinfo.com for $ 37.5 m in an all stock swap deal. Cricinfo is ranked among the world's largest digital cricket publishers. The multi-million dollar deal will be executed by issuing American Depository Shares (ADS) to the foreign firm. This will be completed in two tranches. First, $ 21.5m worth of stocks will be given to the existing seed investors who have decided to sell their equity in Cricinfo to Satyam. The balance $ 16m worth of stock will be given to Cricinfo towards subscription of fresh equity. With a price of $ 37.5m for a 25% stake, this deal gives Cricinfo.com a valuation of $ 150m (Rupees 640 crores), making it the largest valuation given by an Indian company to any firm in virtual space. Source: The Economic Times, June 6, 2000. The core group of secretaries on disinvestment have recommended that the monopoly of the state owned Videsh Sanchar Nigam Ltd., over the international long-distance service be removed by 2002 as against the earlier deadline of 2004. The Dept. of Telecom Services (DTS), has however opposed the proposal to end VSNL’s monopoly by 2004. The core group recommended that these issues be placed before the Cabinet Committee on Disinvestments. Sources also reported that the core group pointed out the need to induct a strategic partner in MTNL and the lowering of Government equity. Failure to induct a strategic partner might result in a negation of disinvestment proceedings in light of the stiff competition put up by the private sector. At present the government owns a 56 % stake in MTNL, and a 54% stake in VSNL. Source: Business Standard, June 1, 2000. IT Bill introduced despite Opposition The government on Monday introduced the IT Bill for fighting cyber crime and regulating e-commerce amid protests from Opposition parties. The government, which rejected the Opposition's demand for referring the bill to a Joint Select Committee, said it cannot wait as the country would miss the opportunities offered by the internet boom. Mindful of the complaints from the knowledge-based sector, the government has dropped two controversial clauses suggested by Parliament's standing committee on science and technology. These two clauses had drawn a host of criticism. The controversial suggestions pertained to compulsory registration of websites and portals within India as well as maintenance of a register of visitors by cybercafes. Mr Mahajan said moving the bill for consideration. The minister for I&B said it was time that India put a cyber law in place. The bill has retained a much criticized provision allowing officers, not below the rank of a deputy superintendent, to raid any place and arrest people without a warrant for suspected cybercrimes. Government leaders said that the bill will give a boost to the information technology sector. NASSCOM has been maintaining that e-commerce transactions originating in India were assessed at more than $100 million last year and are set to become five times that figure this year. The bill was originally introduced in Parliament in December last year. The Standing Committee had recommended 35 changes, and the bill was redrafted 155 times. Source: The Economic Times, May 17, 2000 The National Association of Software and Service (Nasscom) has opposed some amendments related to cybercafes in the IT Bill 2000. Nasscom executive director Dewang Mehta said it appeared completely unnecessary to consider the suggestion that cyber-cafes should be forced to maintain details about all persons visiting the cafe and the websites accessed by them. He also voiced his disagreement with the suggestion of mandatory registration of every website in India on the grounds of duplication of efforts. But Mr. Mehta supported the suggestion to enhance the punishment for people who create and inject viruses into computer systems. "The committee suggested the virus creator will be fined Rs 1 crore instead of the earlier provision of a fine of Rs 10 lakh," he said. Nasscom requested the government to pass the IT Bill in Parliament’s current session. "If it is passed and implemented in the next 1-2 months, Indian e-commerce transactions in ’00-01 could rise by 500 per cent from Rs 450 crore to Rs 2,500 crore." Source: The Economic Times, May 15, 2000 The Parliament on Wednesday approved the Telecom Regulatory Authority of India "TRAI" (Amendment) Bill,'00 seeking to strengthen the regulatory body by bifurcating it into a tribunal and a regulator with the Rajya Sabha passing the measure by a voice vote. The main features of the bill are that more regulatory powers would be given to the TRAI, whereas adjudication would clearly be the realm of a next dispute settlement body the Telecom Tribunal. Source: The Economic Times, March 16, 2000 Reliance, BPL and Finolex get nod for fibre-optic networks The Karnataka government has given clearance to lay optic-fibre networks to provide Internet services bypassing the VSNL gateway to Reliance Industries, BPL and Finolex-luscent Technologies. The Reliance network will originate from Maharashtra and then run through Bangalore and Chennai before taking the ocean route to reach the Singapore gateway. The promoters plan to skip the VSNL gateway and instead rely on the Singapore base to provide Internet services. In a big boost to private initiative, the state government has decided not to charge any user fee for using the roads. It also proposes to issue a one-point, all-encompassing order that directs all state agencies concerned to give permission for digging up the roads for laying cables. Source: The Economic Times, March 15, 2000 Bill to set up dispute settling tribunal passed. The Lok Sabha Today passed the Telecom Regulatory Authority of India ("TRAI") Amendment Bill for setting up a disputes setttlement tribunal. The dispute settlement and appellate tribunal would adjudicate upon disputes between licensor and the licensee, the service producers and consumers, thereby reducing the burden on TRAI. Source: The Economic Times, March 14, 2000 PAC want TRAI under CAG jurisdiction The Parliamentary public accounts committee ("PAC") has called for bringing TRAI under the full auditional jurisdiction of the Comptroller and Auditor General ("CAG") before its approval by Parliament as the recent ordinance for amendment of the TRAI Act disempowers the CAG from monitoring TRAI except for an insignificant area of expenditure incurred in pays and allowances. The PAC Chairman argued there is no justification for areas like tariff fixing, revenue sharing and conditions of licensing to be excluded from the purview of audit. He further stated that issues such as cross subsidy, long distance and local calls and expansion of telephone facilities are matters of public concern and it is necessary that the government has the last word on such matters. Source: The Economic Times, March 14, 2000 DoT to permit pvt cos to set up gateways, sell bandwidth to ISPs The telecom commission has decided to do away with the policy of allowing only the Internet Service Providers ("ISP") to set up gateways for international connectivity. The Department of Telecommunications ("DoT") would soon allow the private companies to set up gateways and sell bandwidth to the ISPs. The international gateway will be used only for carrying the Internet traffic, using both "C" Band and "Ku" Band. It will be the duty of the gateway operator to ensure that the bandwidth provider (the Satellite Company) gives the complete monitoring rights to the telecom authority. Source: The Economic Times, March 13, 2000 17 ISPs get in-principle clearance for international gateways The Department of Telecommunications (DoT) has granted 17 Internet Service Providers (ISPs) in-principle clearance for setting up international gateways. Data Access, Internet Promoters, STPI, Jain Studios, In Tech Net, Direct Internet, Dishnet and Satyam Infoway are some of the companies that have been granted in-principle clearances. DoT will award final licences to these companies once they get frequency clearances from the wireless planning cell (WPC) for using the spectrum. In December, the government permitted ISPs to use foreign satellites for international connectivity.The ISPs can use both the C band and Ku band for carrying Internet traffic. However, ISPs are not allowed to set up international gateways using submarine cables and have to go through VSNL to use submarine cables for international connectivity. Source: The Economic Times, April 10, 2000 Telecom Update Cell Industry valued at $ 5.4 bn The Indian cellular service industry has been valued at $5.4 billion (about Rs 23,520 crore) according to a still unreleased report by international consultancy Frost & Sullivan. The report, ‘Valuation of Indian Cellular Services Operators’, estimates the cellular industry’s accumulated losses at $805 million (about Rs 3,506 crore) at the end of 1999-2000. According to the report, with accumulated losses of $690 million (about Rs 3,005 crore), the circle operators account for a majority of the losses incurred by the industry. The metro operators, especially, the Mumbai and Delhi operators are estimated to have covered-up a part of their losses in the last fiscal. Source: Business Standard, April 10, 2000 Private Telecom operators may be given a new round of concessions. This includes dilution of the lock-in clause, one of the conditions for bailout, under which basic and mobile telecom services firms migrated from the fixed licence fee regime to the revenue sharing plan. A Committee examining the problems facing the telecom firms has decided to recommend dilution of the lock-in clause under three specific conditions.
These recommendations would be submitted to the group on telecom and infotech convergence headed by finance minister Yashwant Sinha. Source: Business Standard, February 10, 2000 Further cuts in mobile tariffs likely The stage is set for another round of tariff reductions for mobile subscribers, with the TRAI taking up this issue, as the first matter to be examined after it was re-constituted last month. Cellular operators have been asked to submit data on primarily licence fee costs following migration from fixed licence fee to the revenue sharing regime. Instead of high fixed licence fees, operators now pay an interim revenue sharing rate of 16% of adjusted gross revenues. According to a TRAI official, "The difference will be computed and reflected on the tariff's. The TRAI has also indicated that the benefits would be passed on with retrospective effect. There are indications that this may be a downward revision. Source: Business Standard, February 10, 2000 Government keen to pass IT bill in budget session: minister Union Information Technology Minister Pramod Mahajan said that IT is the fastest growing industrial sector and expressed the hope that the IT bill would be passed in the forthcoming session of Parliament. Source: The Economic Times, February 9, 2000 Eight ISP gateways can use foreign satellites The Department of Telecommunications (DoT) has granted an in-principle clearance to eight Internet Service Providers (ISPs) for 25 international Internet gateways using foreign satellites. According to Mr. N Parameswaran, deputy director general, DoT, a few more Internet gateway applications were likely to be cleared shortly. No licence fees were applicable and foreign satellites were permitted as hosts. The only conditions for private gateway operators were that their satellite hosts should have a co-ordinate over India and the frequency should be cleared by DoT to prevent any overlap and the operators should also adhere to the International Telecom Union (ITU) rules. The Senior DoT official clarified that the government's Internet policy permitted ISPs to set up last mile connectivity, and that the permission would be granted to private cable operators for delivering Internet over their cable systems. Mr. Parmeswaran also said that a liberal regime has been set up and the only control DoT is enforcing is the 49% cap on foreign equity that is applicable to the telecom sector. Source: The Economic Times, February 9, 2000 Telecom Update TRAI delays tell on services, says DoT The Department of Telecommunications (DoT) has informed the standing committee on communications that the Telecom Regulatory Authority of India (TRAI) has considerably delayed its recommendations on important issues such as the number of private operators in a circle, entry fee & revenue sharing of telecom service operators, selection procedure, terms and conditions for new licences for Global Mobile Personal Communication Services and fixed service providers, and the licence fee arrangement for migration of existing operators from fixed licence fee regime to revenue sharing. This has adversely affected the growth of telecom services in the country. DoT also criticized the tariff order TRAI issued in March 99, in which the telecom regulator reduced long distance tariff. According to DoT, this move will cost it a Rs 2500-crore revenue loss. DoT has also accused TRAI of not taking action against private basic telecom operators who had committed to provide village public telephones in a time bound manner as per the terms and conditions of the licences, and had not done so. Source: The Economic Times, February 9, 2000 BFL Software Buys Mphasis in a Rs 864-Cr All Stock Deal, Gets Jerry Rao as Chief BFL Software has agreed in principle to acquire Rao’s US-incorporated Mphasis in an all-stock deal that’s worth about Rs 864 crore. Jerry Rao even gets to be chairman of the combined entity. Shareholders of Mphasis Corp will get 6.5m shares of BFL Software, which at the current market price of Rs 1,329. This is the second major all-stock deal in the software business after Leading Edge Systems last December acquired ECapital Solutions for 7.3m of its shares. The deal will be finalized after the necessary approvals from the regulatory bodies in India and US. Mphasis will then become a wholly owned subsidiary of BFL Software. The board of directors of BFL Software will take up the deal on February 14 for discussion. The common point in the deal seems to be is venture capital firm Barings that holds 52 per cent equity in BFL Software and is an investor in Mphasis as well. Barings will remain a significant investor in the combined entity. Mphasis has around 250 employees, of whom 170 are based in India and 80 abroad. The company is primarily engaged in providing web-enabled solutions for both established companies and Internet start-ups. BFL has a technical team of over 375 software professionals. BFL Software offers services in Tandem-based solutions, client server and databases, Internet and e-commerce, networking applications, systems software, ERP, Y2K, IBM, Euro, and IT-enabled services. BFL recorded a minor loss for the third quarter ended December ’99. Source: The Economic Times, February 8, 2000 The Department of Telecommunications (DoT) is close to breaking Videsh Sanchar Nigam's monopoly in international gateways. The department today issued the first in-principle clearance to Chennai-based national Internet service provider (ISP), Dishnet, to set up a private international gateway. DoT will give in-principle clearances to seven more ISPs tomorrow, sources said. Dishnet was required to submit its acceptance of the terms and conditions of the licensing conditions within seven days of the issuance of the in-principle clearance. DoT has nominated the Centre for Development of Telematics (C-DOT) for installing monitoring equipment at the gateway. This equipment will enable security agencies such as RAW and IB to monitor the use of the gateway. The cost and monitoring of the equipment, including its commissioning have to be borne by the licensee. The telecom authority will have full rights to monitor all the traffic that goes through the gateway. It will be the duty of the ISP to ensure that the bandwidth provider (satellite company) gives complete monitoring rights to the telecom authority. The government in December permitted ISPs to use foreign satellites for international connectivity. The ISPs can use both c-band and ku-band for carrying Internet traffic, but are barred from setting up a gateway using submarine cables. They will have to go through VSNL for international connectivity through submarine cables. Source: The Economic Times, February 8, 2000 Move to allow 100% FDI in telecom The department of industrial policy and promotion has decided to recommend allowing 100% foreign equity in the telecom sector to the newly constituted group of ministers (GoM), set up to review sectoral caps on foreign investment. At present there is a cap of 49% on foreign equity for all major telecom service ventures. This includes investments in basic cellular, paging, Global Mobile Telephone Services via satellite (GMPCS), Internet and very small aperture terminal (V-sat) services. The Department of Telecom (DoT) has now forwarded a proposal to permit 100% foreign equity through the automatic route in telecom sector. The department also feels that the security reasons for which the 49% cap on foreign equity was originally clamped do not hold good any more since technology is available to tackle the problems. The move to remove the cap for telecom is also aimed at achieving the FDI targets of $ 10 billion. The DoT is yet to formalize its position on this issue according to the sources. Source: Business Standard, February 7, 2000 IT Infrastructure to get big push, 100% FDI in pipeline The Commerce and industry ministry has drawn up a major push for the IT industry, recommending 100% FDI through automatic route for all operations that provide infrastructure for this industry. This includes e-commerce enabling activities and Internet backbones. The new FDI proposal has a specific focus on areas of infrastructure, be it the IT sector or airport infrastructure or even telephony. Source: The Economic Times, February 4, 2000 Move to lift FDI cap on e-commerce The Industry and commerce ministry is considering a proposal to scrap the 49% cap on e-commerce activities and instead prepare a negative list of products, which cannot be sold online. According to the sources, the ministry is holding talks with the ministry of information technology to prepare the list of items, which will not be allowed to be traded online. The move is aimed at removing the ambiguity regarding e-commerce activities. At present, companies can only use the Internet for order placements from customers and vendors in absence of any legal sanctity for online payments. According to the sources, 100% owned foreign companies are already operating in a host of industrial sectors in the absence of any sectoral cap for foreign investments in these sectors and it is now practically difficult to put a FDI cap of 49% in the specific activity of e-commerce by them. Source: Business Standard, February 3, 2000 Panel favours repealing of Telegraph Act The committee under the convenorship of Fali Nariman, is one of the panels constituted by the Group on Telecom and Information Technology convergence headed by Finance Minister Yashwant Singh, in its interim report has suggested amendments to the Indian Telegraph Act (ITA) to reflect the convergence of telecom, infotech, television and electronics. The committee has said that the new act, which would deal with the carriage of information through various channels, should abolish the Centre's exclusive privilege with respect to the telegraph. According to the report, the word "telegraph" should be replaced with the word "telecommunication", wherever applicable. Source: Business Standard, January 18, 2000 DoT locks horns with COAI on interest, lock-in The Department of Telecommunications (DoT) has strongly opposed demands by the Cellular Operators Association of India (COAI) and the Confederation of Indian Industry (CII) for a deduction in interest and liquidated damages payable by cellular operators. The demands for scrapping the five-year lock-in period within which promoters have to maintain a minimum 10% stake have also been opposed by DoT. Source: The Economic Times, January 18, 2000 Telecom cos' arms may have to share revenues The revenue sharing formula between the private telecom service providers and the Government may also require a telecom operator's subsidiary to share its revenues with the government if the revenue generating activity of the operator has been transferred to it. According to the sources, the licensing finance cell of DoT has recommended that the revenue of 'associate' companies of an operator should be added to the revenue of the operator for the purpose of calculating the amount of the revenue to be shared with the Government. The Telecom Commission has agreed to this recommendation. Source: The Economic Times, January 18, 2000 Information Technology Update Cabinet clears 74% FDI in satellite firms The Union Cabinet allowed 74% Foreign Direct Investment (FDI) in satellite systems for telecommunications, broadcasting and Internet related services with the condition that the company setting up such projects will have to be registered in India. Such firms will be allowed to establish and operate satellite systems, Investments by non-resident Indians and overseas corporate bodies will be treated at par with FDI. Source: Business Standard, January 17, 2000 VSNL to hike stake in ICO to defend marketing rights VSNL is keen on investing more money in ICO Global communications to salvage some lost ground, after being stuck with unrealizable equity investments of $ 150m and losing its status as the second-largest shareholder in the ailing satphone company. Craig McCaw, chairman, Teledesic and Subhash Chandra, chairman ZEE Telefilms, together own 74 percent of ICO. VSNL's willingness to invest in ICO is seen by many as an effort to protect its exclusive distribution rights to ICO's services in India. Source: The Economic Times, January 10, 2000 DoT moves to cancel 3 mobile cos' licences The DoT wants to cancel cellular service-provision licences for five cellular circles operated by Hexacom, Modicom and Fascel. These circles are Rajasthan and Northeast, whose licences are held by Hexacom; Karnataka and Punjab, held by Modicom; and Gujarat, for which Fascel is the licensee. The recommendation to scrap these licences comes in a note prepared by the Telecom Commission addressed to the minister of communications. The reason given for the recommendation is non-payment of licence fee obligation. The licence fees were supposed to be securitised by bank guarantees by November 30, 1999 valid upto March 31, 2000. Modicom is yet to securitise anything, while Fascel has securitised approximately about a third of its commitment and Hexacom has securitised about a quarter of its total dues. Source: The Economic Times, January 10, 2000 |