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New Delhi, Feb 6 () Industry body TAIPA on Thursday said it is disappointed that the Union Budget did not outline any relief measures for the telecom sector which is facing financial stress. Tower and Infrastructure Providers Association (TAIPA) said the industry had been hoping for support from Budget on the alignment of DoT-issued Right of Way (RoW) Rules in every state, which has been pending for the last three to four years. RoW Rules refer to norms for rolling out telecom infrastructure. "Out of 37 States/UT's, only 16 states have broadly aligned their policy with RoW Rules 2016 and other remaining states still need to align their policy with Row Rules 2016," TAIPA said. Stating that the telecom industry had played a key role in shaping India's economy, TAIPA Director-General T R Dua asked the government to come up with specific measures suitable for the telecom industry at a time when the sector is facing financial stress. "Today, the telecom industry is not in a financially healthy situation and we urge the Government to come up with the best measures suitable for the telecom industry which has a lot of potential in terms of expansion and opportunities," Dua said. On the issue of Right of Way, TAIPA said that policy anomaly in the states will deprive citizens from seamless network and internet connectivity and impede the rollout of new technologies. "Representatives of TAIPA have been making enormous efforts for the implementation of the policy through joint meeting, submissions with various advisories and directions by Department of Telecom (DoT) but no action has been taken by the various State Governments in these many years," the association rued. MBI ABM

No relief for telecom industry in Budget: TAIPA

<div class="image-container float_right" style="width:400px"><div class="image"></div>Justing Sullivan/Getty Images</div>Bankers involved in mergers and acquisitions have been checking their phones more often than text-crazy teenagers recently, to keep up with a flurry of offers for American mobile-phone companies.
On April 15th DISH Network, a satellite-TV operator, became the latest bidder to enter the fray when it launched a $25.5 billion offer for Sprint Nextel, the country’s third-largest wireless firm.
DISH is not the only suitor for Sprint. Last October Japan’s SoftBank offered to buy 70% of the wireless operator for just over $20 billion; and this week it boasted that its agreed deal promised “superior” benefits to DISH’s unsolicited one.
Sprint, in turn, is seeking to take full control of Clearwire, another wireless company of which it already owns half. And T-Mobile USA, the fourth-biggest mobile operator, is pushing ahead with a plan to merge with the fifth-largest, MetroPCS.
The scale of the bidding is breathtaking. According to Dealogic, a data provider, wireless deals worth $49 billion have already been announced in America this year, compared with $53 billion-worth of transactions for the whole of 2012.
And more telephone-number-sized offers could be on the way. What is driving this dealmaking? And who is likely to come out on top when the dust settles?
The answer to the first of those questions is that the bids are aimed at helping America’s mobile smaller fry compete more effectively with Verizon Wireless and AT&amp;T, the behemoths that together serve about 70% of the country’s wireless subscribers. As the chart below shows, the two titans’ investment in their wireless networks and in the spectrum needed to carry voice and data traffic over them has dwarfed that of their rivals. “It’s a two-plus-two market in America now,” explains Rajeev Chand of Rutberg &amp; Company, an investment bank, “and the two smaller guys have to figure out how best to compete and survive.”
<table class="image-container float_right" width="200"><tr><td><div class="image"></div>The Economist</td></tr></table>When it comes to spectrum, DISH has a clear edge over its rival for Sprint’s affections.
The satellite-TV firm, whose boss, Charlie Ergen, is a former professional gambler, has cleverly snapped up billions of dollars’ worth of airwaves which it has permission to convert to wireless use.
And in January it launched an unsolicited offer of its own for Clearwire. Mr Ergen has made it clear that DISH does not want to build its own cellular network, but would rather find a partner with an existing one.
SoftBank cannot offer Sprint airwaves in America, but it can bring plenty of cash to the table thanks to Japan’s near-zero interest rates. It also brings the experience of Masayoshi Son, the firm’s founder and boss, who snapped up several companies to turn SoftBank Mobile into an effective competitor against two larger rivals in the Japanese market. SoftBank claims it is on track to close its deal with Sprint on July 1st. But Mr Son may have to raise his bid if he is to keep Sprint’s shareholders on board now that Mr Ergen has joined the game.
T-Mobile’s owner, Deutsche Telekom, has already had to sweeten its offer for MetroPCS after facing pressure from shareholders in the American firm who felt the original terms would have left the combined company with too heavy a debt burden. On April 15th MetroPCS’s board approved the revised proposals, which will be put to shareholders on April 24th. If they are accepted the merged firm will have debt of $11.2 billion rather than $15 billion, and pay a lower interest rate than originally planned, giving it more financial flexibility to buy radio spectrum and build up its wireless network.
Regulators seem keen to give Sprint and T-Mobile a helping hand when it comes to spectrum. In a recent submission to America’s Federal Communications Commission (FCC), which oversees the telecoms industry, the Department of Justice urged it to make sure that the smaller wireless operators get a share of low-frequency bands in a future auction of spectrum given up by television stations. Both Sprint and T-Mobile are short of such spectrum, whose ability to carry signals over long distances and into buildings makes it especially valuable.
But even if they get such help, the smaller firms will still find it tough to prosper. Mike Garstka of Bain &amp; Company, a consulting firm, says that in most mobile markets around the world the two biggest operators make virtually all of the profit, leaving smaller rivals battling to survive. This has certainly been the case in Europe, where a long tail of smaller operators have struggled to make money in an intensely competitive market.
So if they are ultimately to stay in business, Sprint and T-Mobile may end up having to join forces at some point. Some analysts speculate that if Mr Ergen fails in his bid for Sprint, he could pounce on the newly merged T-Mobile instead. Given his penchant for dealmaking, he could then try to engineer a blockbuster merger with Sprint—a move that would inevitably attract scrutiny from regulators.
Antitrust watchdogs rightly blocked AT&amp;T’s attempt to swallow T-Mobile back in 2011. But both it and Verizon Wireless are unlikely to stand by idly while their competitors beef themselves up.
AT&amp;T could bid for a satellite operator or other firm that brings it more spectrum. Verizon Wireless is already trying to persuade Clearwire to part with some of its airwaves. Verizon Communications, which owns a 55% stake in Verizon Wireless, is also keen to buy the remaining 45%, held by Britain’s Vodafone, to give the firm more operating flexibility. Any such deal would involve Croesus-like sums of money. Bankers in the telecoms-mergers business should make sure they keep their phones charged.

Get Ready For Massive Takeover Bids In The Telecom Industry...

New Delhi, Dec 19 () Billionaire Sunil Bharti Mittal on Thursday said a combination of rock-bottom tariffs and high consumption is killing the telecom industry and sector regulator Trai needs to urgently intervene to strike a balance between the needs for protecting investments and consumer interest.
 "...but, I think we need to have a balance between requirement of investments and consumer on the other side," Mittal, chairman of Bharti Airtel, told reporters after a pre-Budget meeting between Finance Minister Nirmala Sitharaman and corporate leaders.
 "My view is Rs 200 ARPU (average revenue per user) is eventually going to Rs 300 ARPU... At the lower end, Rs 100 for a customer over a month of consuming rich data, voice and other services and on the upper end Rs 450-500... therefore, blended eventual landing point of Rs 300 a month, which will still be USD 4 a month... by far, the lowest anywhere in the world and yet consuming two or three times more data than anywhere else in the world," Mittal said.
 The industry needs to get to that balance, he said adding that Trai needs to work on this as the industry "has not been able to have an orderly mechanism to get to that point".
 "We are unnecessarily killing this industry in a manner and way that is not conducive for our industry, and that's why we need Trai intervention," Mittal added.
 The comments of the Airtel chief come just days after the Telecom Regulatory Authority of India (Trai) initiated talks to prescribe floor price for call and data, and also deferred by one year the scrapping of the charge paid by mobile phone users for calls made to rival networks.
 The two moves came as a big boost to Airtel and Vodafone Idea that are staring at a liability of thousands of crores in unpaid past statutory dues following a Supreme Court ruling. Through their association, the operators had been pitching to the government for fixing a floor rate for calls and data.
 The telecom call and data rates are at present under forbearance or not regulated.
 But, earlier this week, Trai released a consultation paper to fix minimum or floor rates for mobile phone calls and data, a move that will effectively end the regime of free calling and dirt cheap data.
 The outcome is likely to lead to further hike in mobile call and data cost as the industry wants average revenue per user to reach Rs 300 per month from about Rs 125 at present over a period of two years -- better revenue realisation per user will offer a much-needed breather to the stressed telecom industry where debt levels have soared to Rs 7.8 lakh crore.
 Bharti Airtel had posted a staggering Rs 23,045 crore net loss for the second quarter ended September 30, due to provisioning of Rs 28,450 crore in the aftermath of the SC ruling on statutory dues.
 According to government data, statutory liabilities in the case of Bharti Airtel add up to nearly Rs 35,586 crore, of which Rs 21,682 crore is licence fee and another Rs 13,904.01 crore is the SUC (spectrum usage charges) dues (excluding the dues of Telenor and Tata Teleservices). RSN RKL MBI HRS

We are killing telecom industry in a way that is not conducive: Sunil Mittal

New Delhi, Feb 1 () The telecom industry on Saturday expressed disappointment at the Budget not spelling out any relief in levies and taxes for the "severely-distressed" sector saddled with Rs 1.47 lakh crore in unpaid statutory dues, and rued that it did not receive significant support despite being backbone of the country's economy.
 The telecom industry had been pinning its hopes on the Union Budget to offer some breather on licence fee and spectrum usage levies, given that it has to cough up billions of dollars in adjusted gross revenue (AGR) dues to the government.
 "None of our key recommendation appear to have been taken into consideration...It is also disappointing to note that telecom was not given an infrastructure status even though a slew of crucial reforms has been announced on infrastructure. The telecom sector, which is the backbone of the country's economy, did not receive significant support," Cellular Operators Association of India (COAI) Director General Rajan Mathews said in a statement.
 COAI had been batting for reduction in these levies -- licence fee to 3 per cent from 8 per cent at present and SUC to a flat 1 per cent from average of about 5 per cent. At present, the licence fee of 8 per cent includes a USO Fund component of 5 per cent. 
 Industry experts had estimated that a 6 per cent reduction in licence fee or spectrum usage charges (SUC) could free up Rs 8,000 crore for the industry, which could be infused into network expansion and technological advancements.
 "...it is disappointing that there were no announcements made regarding the rationalisation of levies and taxes currently imposed on the severely distressed telecom sector and telecom infrastructure is not taken into consideration that is going to build out the country," he said.
 Mathews, however, noted that the Budget has laid major emphasis on boosting domestic manufacturing of network products, mobile phones, electronic equipment, semiconductors and healthcare products, and Rs 27,300 crore has been allocated for development of industry and commerce by 2021.
 The Budget proposed that the New India will be driven by innovations, artificial intelligence and computing where data will be the new oil, and outlined other significant initiatives such as linking of 1 lakh gram panchayat to the BharatNet program by this year at an outlay of Rs 6,000 crore.
 "A financially healthy and robust telecom sector is imperative to support all these future forward initiatives," Mathews said.
 While relief measures continued to elude the industry, the government has more than doubled its revenue estimate from the debt-ridden telecom sector to Rs 1.33 lakh crore in fiscal year 2020-21, mainly on account of levies derived from AGR.
 In the receipt budget, the government has pegged revenue collection at Rs 1,33,027.2 crore for financial year 2020-21 under communications head. Receipts under 'Other Communication Services' mainly relate to license fees from telecom operators and receipts on account of SUC, the budget document explained.
 Mathews said increased receipt estimates appeared to factor in AGR payments, levies like licence fee and spectrum charges, and auction proceeds.
 As it is, the troubled industry is buckling under Rs 1.47 lakh crore of statutory dues in the wake of a recent Supreme Court ruling on AGR. As things stand today, telecom companies owe the government Rs 92,642 crore in unpaid licence fee, and another Rs 55,054 crore in outstanding SUC dues.
 Bharti Airtel's liabilities alone add up to nearly Rs 35,586 crore, of which Rs 21,682 crore is licence fee and another Rs 13,904.01 crore is SUC dues (excluding the dues of Telenor and Tata Teleservices).
 For Vodafone Idea, this number stands at a cumulative Rs 53,038 crore, including Rs 24,729 crore of SUC dues and Rs 28,309 crore in licence fee.
 The remaining liability is with state-owned BSNL/MTNL and some of the shut/bankrupt telecom companies.
 The Supreme Court had allowed three months to the affected telecom operators to pay the amounts due to the government. While the deadline for that expired on January 23, the Telecom Department did not take any coercive action against defaulters given that their appeals seeking relaxation in payment timeline was pending before the apex court.
 Bharti Airtel, Vodafone Idea Ltd, and Tata Teleservices have jointly filed a modification application in the Supreme Court seeking more time to pay statutory dues.
 The fresh plea for relief on payment schedule came after Supreme Court, last month, dismissed the review petitions filed by telecom companies against the apex court's October 24, 2019 verdict on AGR. MBI RVK

Telecom industry rues absence of relief on levies, taxes for stressed sector

<div class="image-container float_right click-to-enlarge"><div class="image"><a title_source="BII" title_caption="" class="zoomin" href="http://static5.businessinsider.com/image/51793e83eab8eafb2000001c-960/bii_ottmsg_msgbrkdown-1.png"></a>BII</div></div>Depending on whom you ask, messaging is either the most important <keyword id="6354485" type="CITY" weightage="60" keywordseo="mobile">mobile</keyword> phone feature or the second-most — after regular-old phone calls. Messaging, led by SMS texts, has grown to become a huge global industry and a revenue windfall for the world's mobile carriers: <a href="https://intelligence.businessinsider.com/mobile-messaging-a-disruptive-force-2013-4?utm_source=House&amp;utm_medium=Edit&amp;utm_term=OTT&amp;utm_content=link&amp;utm_campaign=BIIMobile%20">$140 billion annually over the next three years. </a>
However, a new batch of companies are providing over-the-top (OTT) messaging services — services that send instant messages over the Internet and don't depend on wireless cell networks. 
The OTT services are already causing big changes in the mobile industry. From Facebook's Messenger service to Santa Clara, Calif.-based startup <keyword id="790242" type="UNKNOWN" weightage="60" keywordseo="WhatsApp">WhatsApp</keyword> — <a href="https://intelligence.businessinsider.com/mobile-messaging-a-disruptive-force-2013-4?utm_source=House&amp;utm_medium=Edit&amp;utm_term=OTT&amp;utm_content=link&amp;utm_campaign=BIIMobile%20">which boasts 300 million monthly active users</a>, more than than Twitter, and Korea's LINE, these players are some of the biggest crowd-draws in mobile. It's not just carriers that are threatened, but legacy social media too. 
In a <a href="https://intelligence.businessinsider.com/mobile-messaging-a-disruptive-force-2013-4?utm_source=House&amp;utm_medium=Edit&amp;utm_term=OTT&amp;utm_content=link&amp;utm_campaign=BIIMobile%20">new report</a> from <a href="https://intelligence.businessinsider.com/welcome?utm_source=House&amp;utm_medium=Edit&amp;utm_termOTT&amp;utm_content=link&amp;utm_campaign=BIIMobile">BI Intelligence</a>, we profile some of the most important OTT players in mobile messaging, and detail the monetization opportunity for OTT messaging. We also identify what competitors must do — and some have already started doing — to guard against the OTT threat. 
<a href="https://intelligence.businessinsider.com/welcome?utm_source=House&amp;utm_medium=Edit&amp;utm_termOTT&amp;utm_content=link&amp;utm_campaign=BIIMobile">Access The Full Report And Data By Signing Up For A Free Trial Today &gt;&gt;</a>
Here's an overview of the monetization opportunity:
<ul>
<li>The size of the opportunity is massive: <a href="https://intelligence.businessinsider.com/mobile-messaging-a-disruptive-force-2013-4?utm_source=House&amp;utm_medium=Edit&amp;utm_term=OTT&amp;utm_content=link&amp;utm_campaign=BIIMobile%20">OTT instant messaging apps are enjoying phenomenal audience growth and message volume.</a> Some back-of-the-envelope estimates have pegged WhatsApp revenues at $63 million. There's a rush of developers and publishers scrambling to find their place in this market. <a href="https://intelligence.businessinsider.com/mobile-messaging-a-disruptive-force-2013-4?utm_source=House&amp;utm_medium=Edit&amp;utm_term=OTT&amp;utm_content=link&amp;utm_campaign=BIIMobile%20">MessageMe</a><a href="https://intelligence.businessinsider.com/mobile-messaging-a-disruptive-force-2013-4?utm_source=House&amp;utm_medium=Edit&amp;utm_term=OTT&amp;utm_content=link&amp;utm_campaign=BIIMobile%20">, a new aspirant to the field of OTT messaging heavyweights, launched earlier this year and attracted a million users in less than two weeks. </a><a href="https://intelligence.businessinsider.com/mobile-messaging-a-disruptive-force-2013-4?utm_source=House&amp;utm_medium=Edit&amp;utm_term=OTT&amp;utm_content=link&amp;utm_campaign=BIIMobile%20"></a></li>
<li>Advertising: <a href="https://intelligence.businessinsider.com/mobile-messaging-a-disruptive-force-2013-4?utm_source=House&amp;utm_medium=Edit&amp;utm_term=OTT&amp;utm_content=link&amp;utm_campaign=BIIMobile%20">Asian OTT messaging players KakaoTalk and </a><a href="https://intelligence.businessinsider.com/mobile-messaging-a-disruptive-force-2013-4?utm_source=House&amp;utm_medium=Edit&amp;utm_term=OTT&amp;utm_content=link&amp;utm_campaign=BIIMobile%20">WeChat charge brands</a><a href="https://intelligence.businessinsider.com/mobile-messaging-a-disruptive-force-2013-4?utm_source=House&amp;utm_medium=Edit&amp;utm_term=OTT&amp;utm_content=link&amp;utm_campaign=BIIMobile%20"> to send messages, including photos and videos, to users who opt in.</a> KakaoTalk calls this program "Plus Friends," and encourages its users to add brands and show business acts as plus friends, with real and virtual prizes. <a href="https://intelligence.businessinsider.com/mobile-messaging-a-disruptive-force-2013-4?utm_source=House&amp;utm_medium=Edit&amp;utm_term=OTT&amp;utm_content=link&amp;utm_campaign=BIIMobile%20">But, other OTT apps like Viber and WhatsApp have so far </a><a href="https://intelligence.businessinsider.com/mobile-messaging-a-disruptive-force-2013-4?utm_source=House&amp;utm_medium=Edit&amp;utm_term=OTT&amp;utm_content=link&amp;utm_campaign=BIIMobile%20">said no to advertising. </a></li>
<li>Carrier partnerships: These are nascent but could work in certain markets. WhatsApp boasts 15 carrier deals, including Asian, Middle Eastern, and African operators. <a href="https://intelligence.businessinsider.com/mobile-messaging-a-disruptive-force-2013-4?utm_source=House&amp;utm_medium=Edit&amp;utm_term=OTT&amp;utm_content=link&amp;utm_campaign=BIIMobile%20">Viber and Bubbly</a><a href="https://intelligence.businessinsider.com/mobile-messaging-a-disruptive-force-2013-4?utm_source=House&amp;utm_medium=Edit&amp;utm_term=OTT&amp;utm_content=link&amp;utm_campaign=BIIMobile%20"> have explored or struck deals with carriers in Asia.</a> The carriers promote the messaging <keyword id="6354741" type="UNKNOWN" weightage="60" keywordseo="Apps">apps</keyword> and pre-load them on phones. In exchange, the apps might feature carrier-managed services like enhanced voice calls or data plan top-ups. In China, <a href="https://intelligence.businessinsider.com/mobile-messaging-a-disruptive-force-2013-4?utm_source=House&amp;utm_medium=Edit&amp;utm_term=OTT&amp;utm_content=link&amp;utm_campaign=BIIMobile%20">wireless carrier Unicom has reportedly advocated </a><a href="https://intelligence.businessinsider.com/mobile-messaging-a-disruptive-force-2013-4?utm_source=House&amp;utm_medium=Edit&amp;utm_term=OTT&amp;utm_content=link&amp;utm_campaign=BIIMobile%20">working with the super-popular WeChat, rather than attacking it. </a></li>
<li>Acquisition: Messaging apps might be looking to be acquired by the very mobile players they threaten: social media and carriers. The rumor late last year that Facebook was close to acquiring WhatsApp <a href="http://www.distimo.com/blog/2012_12_why-does-facebook-like-whatsapp/">spotlighted</a> just how dominant WhatsApp has become. I<a href="https://intelligence.businessinsider.com/mobile-messaging-a-disruptive-force-2013-4?utm_source=House&amp;utm_medium=Edit&amp;utm_term=OTT&amp;utm_content=link&amp;utm_campaign=BIIMobile%20">n fact, in many months its download volume exceeded that of Facebook's Messenger app, although WhatsApp is a paid download and Facebook Messenger is free. </a></li>
</ul>
In full, <a href="https://intelligence.businessinsider.com/mobile-messaging-a-disruptive-force-2013-4?utm_source=House&amp;utm_medium=Edit&amp;utm_term=OTT&amp;utm_content=link&amp;utm_campaign=BIIMobile%20">the report:</a>
<ul>
<li><a href="https://intelligence.businessinsider.com/mobile-messaging-a-disruptive-force-2013-4?utm_source=House&amp;utm_medium=Edit&amp;utm_term=OTT&amp;utm_content=link&amp;utm_campaign=BIIMobile%20">Profiles some of the most important OTT players in mobile messaging</a></li>
<li><a href="https://intelligence.businessinsider.com/mobile-messaging-a-disruptive-force-2013-4?utm_source=House&amp;utm_medium=Edit&amp;utm_term=OTT&amp;utm_content=link&amp;utm_campaign=BIIMobile%20">Detail the monetization opportunities and business models for those in the OTT messaging space </a></li>
<li><a href="https://intelligence.businessinsider.com/mobile-messaging-a-disruptive-force-2013-4?utm_source=House&amp;utm_medium=Edit&amp;utm_term=OTT&amp;utm_content=link&amp;utm_campaign=BIIMobile%20">Identifies what competitors must do — and some have already started doing — to guard against the OTT threat</a></li>
</ul>
<a href="https://intelligence.businessinsider.com/mobile-messaging-a-disruptive-force-2013-4?utm_source=House&amp;utm_medium=Edit&amp;utm_term=OTT&amp;utm_content=link&amp;utm_campaign=BIIMobile%20">To access BI Intelligence's full report, sign up for a free trial subscription here.</a>

How Mobile Messaging Apps Are Disrupting The Tech And Telecom Industries

The <a href="http://www.businessinsider.in/searchresult.cms?query=telecom+industry&amp;sortorder=effectivedate">telecom industry</a> will witness<a href="http://www.businessinsider.in/searchresult.cms?query=mergers+and+acquisitions&amp;sortorder=effectivedate"> mergers and acquisitions </a>in billions but one of the things that will take a huge hit is jobs. 
 
Amid the consolidation wave in the telecom sector, there is going to be huge <a href="http://www.businessinsider.in/searchresult.cms?query=job+losses&amp;sortorder=effectivedate">job losses</a>. 
 
“There is no doubt that staff at the head office and circle (offices) are on shaky ground," an HR head told ET, putting 10,000-25,000 jobs at risk. 
 
He said the consolidation will also hit those who are indirectly employed and the number could rise to as much as one lakh. 
 On an average, the <keyword id="34971" type="ORGANIZATION" weightage="20" keywordseo="telecom-industry">telecom industry</keyword> employs more than three lakh people to its workforce directly and indirectly. In the M&amp;As process, about one-third could lose their jobs. 
 
The year 2017 is going to see some big consolidations such as Idea Cellular and Vodafone Plc, Aircel and Reliance Communications (RCom), etc. 
 
"I cancelled my foreign trip with my child because I'd rather have some money saved up just in case," a middle-level executive at a telecom firm told ET. 
 
As per various reports, <a href="http://www.businessinsider.in/searchresult.cms?query=idea&amp;sortorder=effectivedate">Idea</a>, <a href="http://www.businessinsider.in/searchresult.cms?query=vodafone&amp;sortorder=effectivedate">Vodafone</a>, <a href="http://www.businessinsider.in/searchresult.cms?query=reliance+communication&amp;sortorder=effectivedate">RCom</a> and Aircel employ a total 48,000 people. 
 
Most affected departments could be circle chiefs, human resources and finance teams at the central and service area levels. 
 
 "This is such a terrible time. There is no way to show a strong result when there is an operator offering services for free," one of the circle chiefs at one of the merging companies told ET. 
 
There has been no official word from Vodafone, Idea, TELENOR, Aircel and RCom on this.

Telecom industry is going to witness massive layoffs; over 25,000 pink slips loom

New Delhi, Nov 17 () The Indian mobile industry will consolidate further if the government does not offer a material relief on AGR liabilities, regulatory levies and potentially a floor on pricing, according to Kotak Institutional Equities.
 A 'no material relief' scenario would be an industry-structure-altering one, it added.
 "We believe that the Indian wireless industry would consolidate further in case the government does not offer a material relief on...the AGR (adjusted gross revenue) case liabilities...other aspects like recurring regulatory levies, deferred spectrum payments and ...potentially a floor on pricing," Kotak said in a recent report.
 Even as the massive AGR-case-related payout is a meaty gross negative for Bharti Airtel, the potential gross positive from industry consolidation will likely result in a net positive outcome, it said adding that Bharti could be a net beneficiary.
 Credit Suisse noted that Vodafone Idea faced "another operationally weak quarter" and that the government relief measures are "key to sustain".
 The telecom industry has been hemorrhaging, with combined losses of listed mobile firms surpassing Rs 1 lakh crore in the just-ended quarter.
 Last week, India's two leading telecom operators Vodafone Idea and Bharti Airtel reported a combined loss of Rs 74,000 crore for the second quarter ended September 2019, mainly on account of statutory dues arising from the recent Supreme Court order on AGR.
 The apex court has upheld the government's position on including revenue from non-telecommunication businesses in calculating the annual AGR of telecom companies, a share of which has to be paid as licence and spectrum fee to the exchequer. The ruling over statutory liabilities has triggered a rush for provisioning by telecom companies.
 While Vodafone Idea posted a loss of Rs 50,921 crore -- the highest-ever quarterly loss by any corporate in India -- Airtel reported a loss of Rs 23,045 crore.
 On Friday, Reliance Communication posted a consolidated loss of Rs 30,142 crore for July-September 2019 due to provisioning for liabilities after the Supreme Court ruling on statutory dues -- marking the second-highest loss posted by any Indian corporate to date.
 Airtel, Vodafone Idea and other telecom operators have to pay the government a whopping Rs 1.4 lakh crore following the Supreme Court order that has sent shock waves through an industry already grappling with past losses and billions of dollars in debt.
 According to the latest estimates by the telecom department, Bharti Airtel faces a liability of around Rs 62,187 crore (including share of Tata Group of companies and Telenor India), while Vodafone Idea may have to pay about Rs 54,184 crore. The remaining liability is with state-owned BSNL, MTNL and some of the shut/bankrupt telecom companies.
 Stung by colossal losses, Vodafone Idea has said its ability to continue as a going concern is dependent on obtaining relief from the government and positive outcome of the proposed legal remedy.
 The company is also in the process of filing a review petition against the Supreme Court order.
 The Department of Telecommunications had shot off notices to telecom operators to pay their revenue share dues within three months as directed by the Supreme Court. The DoT has given option to telecom operators to clear all the dues on self-assessment basis.
 Last month, the government also constituted a committee of secretaries to explore a financial bailout package for the telecom sector. MBI HRS

Telecom industry to consolidate further in 'no relief' scenario: Kotak Institutional Equities

<a href="http://businessinsider.in/searchresult.cms?query=Indian+telecom+industry&amp;sortorder=effectivedate">Indian telecom industry</a> has lost around 20% revenues due to <keyword id="3260150" type="UNKNOWN" weightage="100" keywordseo="free-services">free services</keyword> being offered by <a href="http://businessinsider.in/searchresult.cms?query=Mukesh+Ambani&amp;sortorder=effectivedate">Mukesh Ambani</a> led <a href="http://businessinsider.in/searchresult.cms?query=reliance+jio&amp;sortorder=effectivedate">Reliance Jio</a>, India Ratings and Research (<keyword id="17697" type="PERSON" weightage="100" keywordseo="Indra">IndRa</keyword>) said on Thursday. 
 
The agency said that a redistribution of market share among the existing telcos is underway as Jio gained a quick subscriber base of 72 million by January 2017 which could cross 100 million by March 2017. 
 <keyword id="6354504" type="UNKNOWN" weightage="100" keywordseo="Reliance-Jio">Reliance Jio</keyword>’s ability to retain market share would be driven by both pricing as well as user experience given the choice of complete reliance on voice over LTE (VoLTE) technology. 
 The ratings agency said that the <keyword id="112601" type="UNKNOWN" weightage="100" keywordseo="indian-telecom-industry">Indian telecom industry</keyword> could witness the increase in the dual sim phenomena in the interim, thereby the data and voice usage pattern for each telco could remain inconsistent and unpredictable. 
 
“Retaining customer base will necessitate the telcos to continue to augment their capacity and coverage for superior speed and virtual network platforms,” it added. 
 
The ratings agency said that consolidation in the industry will help a quicker return of pricing power. 
 
Free cash flows will be negative due to the double whammy of weaker earnings and capex. Telcos will balance debt levels through monetising non-core assets in order to mitigate the pressure on credit profiles,” the agency said. 
 
IndRa has revised its outlook on the telecommunications services sector for FY18 to negative from stable-¬to-negative. 
 
“The negative outlook reflects IndRa’s expectation of longer and deeper than expected deterioration in the credit profile of telcos following the extended free services by Reliance Jio,” it said.

Telecom industry is facing 20% revenue loss, all thanks to Reliance Jio’s free services

New Delhi, Feb 23 () Senior officials of the telecom department and other key ministries met on Sunday to discuss urgent relief measures that can be extended to the telecom industry, which is battling an unprecedented crisis on account of massive statutory dues it owes the government.The meeting, held at the Department of Telecom, lasted for over an hour and is said to have deliberated on options before the government to provide much-needed lifeline to the AGR-hit industry.Telecom czar and Chairman of Bharti Airtel Sunil Mittal had last week made an appeal to the government for cut in levies and taxes to pull the sector out of what he had described as an "unprecedented crisis".Telecom department officials remained tightlipped after high-level government meeting on Sunday, where officials from NITI Aayog and Finance Ministry are said to have been present.DoT Secretary Anshu Prakash remained unavailable for comments.The crucial meeting comes at a time when the telecom companies are staring at Rs 1.47 lakh crore in unpaid dues -- Rs 92,642 crore in unpaid licence fee and another Rs 55,054 crore in outstanding spectrum usage charges.Of the estimated dues that include interest and penalty for late payments, Airtel and Vodafone Idea owe about 60 per cent.While Airtel has raised USD 3 billion in last few months and is expected to have sufficient funds to tide over the AGR crisis, Vodafone Idea - that has only paid just seven per cent of its total Rs 53,000 crore statutory dues - remains deeply vulnerable.The government, meanwhile, is looking to strike a balance between complying with the Supreme Court order on AGR dues, ensuring health of the sector and safeguarding consumer interest.Both Mittal and VIL Chairman Kumar Mangalam Birla continued to meet top government functionaries throughout last week to seek prompt measures that would offer a breather to the sector.A top government official had said recently that attempts are being made to balance the need for health of the sector, consumer interest while complying with the Supreme Court order on statutory dues.Although the official had not elaborated, sector watchers had said the statement alludes to the government keen on ensuring adequate competition by retaining the present three-plus-one model of competition (three private players and one public sector company).The statutory dues arose after the Supreme Court, in October last year, upheld the government's position on including revenue from non-core businesses in calculating the annual Adjusted Gross Revenue (AGR) of telecom companies, a share of which is paid as licence and spectrum fee to the exchequer. The Supreme Court earlier this month rejected a plea by mobile carriers such as Bharti Airtel and Vodafone Idea Ltd for extension in the payment schedule and asked all of them to deposit an estimated Rs 1.47 lakh crore in past dues for spectrum and licences.It threatened to initiate contempt proceedings against top executives of these firms for non-payment.Some telecom firms are already struggling with mounting losses and debt and the additional liability has raised concerns of them defaulting on existing loans.Vodafone Idea has so far paid only Rs 3,500 crore in two tranches. Airtel has paid Rs 10,000 crore out of its estimated liability of over Rs 35,000 crore. Tata Teleservices has paid Rs 2,197 crore, the entire outstanding it believes to have arisen after the October ruling of the apex court for calculating dues. PRS MBI BAL

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