Finance Minister Pranab Mukherjee has rejected the proposal of Telecom Minister A Raja to refund 3G and BWA spectrum fees of state-owned telecom service providers Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL), according to the Business Standard reports. The FM is believed to have cited legal complications to turn down the request.

Both BSNL and MTNL were kept out of auction process and allotted 3G and BWA spectrums much ahead of private players, stipulating that they will pay the fees commensurate with that paid by auction winners. To this end BSNL paid Rs 10186.58 crore for 3G and Rs 8313.8 crore for BWA, while MTNL paid 6564 crore for 3G and Rs 4533.97 crore for BWA. Both PSUs had to avail loans to meet the government deadline for fee payment.

Despite making the payment, both PSUs have been asking for a refund of the amount as they were allotted unremunerative segments, unlike private players, who chose lucrative zones. However, Mr. Mukherjee turned down the proposal for refund of Rs 29,598 crore after a 10-minute meeting with Telecom Minister on Friday. It is believed that the FM was not willing to reconsider the proposal even after Mr. Raja suggested a staggered payment.

The staff unions of both BSNL and MTNL have threatened to go on a three-day strike from 21 September, in the event of rejection of refund proposal. The unions are also planning to follow this up with indefinite strike to make the government accept the request.

Meanwhile, Mr. Raja is said to be working on an alternative proposal to recover the losses suffered by the state-owned telecom providers from providing services in rural areas. The present subsidy that BSNL receives from the Universal Service Obligatory Fund (USOF) towards offering services in rural areas is believed to be insufficient to compensate the losses.

Ending the impasse that had led to allegations and counter allegations at government level, the Department of Telecom amended its telecom license agreement on Wednesday. The latest license rule stipulates all equipment vendors to share all codes and design details. The revision, which comes into immediate effect, also makes provision for levying hefty fines from defaulters. DoT communicated the revisions in its license pact to all telecom license holders, including state-owned BSNL and MTNL.

The communiqué from DoT continues, “The licensor (DoT) shall have the power to allow inspection, analysis and use by the competent experts designated by the government, the hardware and software designs/codes deposited in the escrow accounts to prevent/detect any security hazards, malware and traps at any time or for any criminal investigation purpose.”

DoT clearly states that in case of security breach after deployment of equipment, the licensee need to pay a penalty of Rs 50 crore and the equipment vendor has to pay a penalty equal to 100% of the contract value.

Another stipulation put forth by DoT for equipment vendors is that the equipment information such as source code (password) and design details need to be kept in an escrow account in encrypted format. This would be used only in case of emergencies like security breach. The amendment is aimed at resolving the issue of alleged ban of Chinese equipment vendors. With this, service providers can utilize Chinese telecom equipments, subject to the penalty clause, which is applicable to all suppliers, Chinese or otherwise.

The new license amendment also necessitates appointment of international-accredited network audit and certification agencies with prior approval of DoT to carryout network auditing and testing. The auditing will be initially limited to core equipments like routers, switches and firewall and related software used by telecom operators.

A slew of multi-million pound deals were signed between British and Indian firms during the two-day India visit of the British Prime Minister David Cameron. This was announced by the visiting British Business Secretary Vince Cable today. The deals were inked in defense, infrastructure and technology sectors.

“India is a country where you don’t have to be a multinational to succeed. We have superb UK companies operating here in partnership with Indian firms, and I would encourage more UK firms to explore the opportunities here,” Mr. Cable told media persons.

Kamal Nath, Minister for Road Transport and Highways said that the economic partnership between the two countries goes back 17 years when the then British Premier John Major visited India in 1993.

The deals announced by Mr. Cable are:

1. Benoy architecture firm will develop infrastructure projects in Bangalore and Mumbai.
2. picoChip will provide wireless baseband technology for the 4G network.
3. Griffon Hoverwork will sell hovercraft to the Indian coastguard.
4. Xchanging will build a 2,000 seat processing center in a SEZ in Karnataka.

On the first day of Mr. Cameron’s visit, British aerospace major BAE Systems had signed a £700 million agreement with the state-owned defense heavyweight Hindustan Aeronautics Ltd (HAL) for the licensed production of 57 Hawk advanced jet trainers (AJTs).

Though the British PM’s India visit has been an astounding success, the major stumbling block seems to be the proposed immigration cap by Britain on non-EU citizens. Mr. Cameron tried to allay concerns of the Indians by saying, “What we want is the brightest and best from India and elsewhere. That just means having a proper system in place.”

On Monday, the TDSAT’s decision that the private telecom companies will have to pay charges to BSNL depending on the distance instead of  the earlier uniform charge of 20 paisa per call has been challenged by the private telecommunication companies at  Supreme Court.

The lobby groups of the private telecom companies  namely Association of Unified Telecom Service Providers of India  and Cellular Operators Association of India and have files two petitions in the Supreme Court challenging the orders issued by the sector tribunals.

Chief Justice S.H Kapadia who has headed the bench that has heard the petitions has instructed the operators to file the statements of carrier charges between the years November 2005 to March 2009. These statements have been filed with their respective liabilities against state owned BSNL.

The bench which also comprises of Justice Swatanter Kumar and K.S. Radhakrishnan have provided the telecom operators a period of three weeks and said “File statement of liabilities, which are due on each of the members for the relevant period”.

On behalf of BSNL its Solicitor General Gopal Subramanium has affirmed to the apex court that BSNL would not be involved in taking any coercive action against the private telecommunication companies till the next hearing date for not paying up their carrier charges.

It has been informed to the court by Gopal Subramanium, the Solicitor General, that the private companies owe BSNL around Rs 500 crore as charges.

As on May 21, 2010, the TDSAT (Telecom Disputes Settlement and Appellate Tribunal) has no validated TRAI’s decision to levy uniform charges of 20 paisa per call in intra circles.

However the operators maintain that on May 17, 2006, two letters were sent to TDSAT and the PSU and “wrongly allowed BSNL to levy distance-based carriage charges on the appellant instead of a uniform carriage charge of 20 paisa per minute in case of intra-circle.”