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.

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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.

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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.”

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Vodafone Essar, one of the top mobile service providers in the country launched an eco-friendly solar-powered mobile phone VF 247. At a function held at the Vodafone store in Fort, Mumbai on Tuesday, Marten Pieters, MD and CEO, Vodafone Essar Ltd. unveiled the instrument along with UK’s Chancellor of the Exchequer, Rt Hon George Osborne MP.

“I’m very pleased to help launch Vodafone’s new solar powered handset. It’s the new UK-India economic partnership in action. The handset will get more people connected, paying less and doing their bit for the environment,” said Rt Hon George Osborne MP after the launch.

“Reflecting a strong commitment to the Indian market, Vodafone continues to launch affordable products and services to cater to the differentiated needs of consumers,” Mr. Pieters said. “Vodafone’s solar powered phone is launched for people residing in areas where electric supply is unstable, so that consumers can rely on solar charging to remain connected. This launch is likely to enable more people in rural India to go mobile and thus increase penetration from the current 20%. We will continue to invest to uplift the quality of telecom services and products in India.”

VF 247 comes with an extended solar power battery, which will be immensely useful for rural subscribers who face the problem of erratic electric supply. The phone charges by itself on exposure to ambient light, even inside a room on a normal day, thanks to Sun Boost, the special in-built hardware and software. Eight hours of direct sunlight can fully charge the unit. This would support four hours of talk time or eight days on standby. The solar phone also has all regular features such as color screen, FM radio and a powerful torch light.

Introducing the solar phone will be helpful in boosting Vodafone’s rural network coverage, which stands second nation-wide at 65%. Vodafone also has the second largest subscriber base in India.

Vodafone VF 247 is expected to cost around Rs 1,500, which includes an electronic charger and will be commercially available in India shortly.

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The global ratings agency, Moody’s Investors Service upped India’s sovereign local currency rating by one notch from ‘Ba2′ to ‘Ba1′. Despite this raise, the rating is one notch below the investment grade. India’s foreign currency rating has been retained without change at the lowest investment grade of ‘Baa3′. This means that the country’s local currency sovereign rating outlook is positive, while that of the foreign currency sovereign rating is stable.

“The upgrade of the local currency sovereign rating to Ba1 was prompted by the Indian government’s adoption of a medium-term (2010-15) fiscal consolidation strategy, which is supported by a broadening structural reform programme,” elaborated Aninda Mitra, Moody’s VP and lead sovereign analyst.

To combat recession, the government had introduced various stimulus packages during 2008-09, which derailed plans of narrowing fiscal deficit. This led to further widening of fiscal deficit and various international rating agencies issuing warnings of downgrading sovereign ratings. However, with the government systematically tackling the issue of fiscal deficit with diverse stimulus exit strategies of varying scales, it is expected to reach below 5.5% of the GDP during the current fiscal.

The rating agency said, “Moody’s will consider unifying India’s local and foreign currency ratings at Baa3 should the track record of fiscal reforms deepen, and if — currently higher than usual — inflation pressures normalize.” This would provide the much-needed boost to government’s fiscal reforms and help in improving the creditworthiness of rupee.

The latest development means added confidence in the country’s economy and is useful in reassuring foreign investors and in attracting funds to India. This could also help in strengthening the rupee against foreign currencies, which in turn could bring in additional funds.

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