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Strategies & Market Trends : India Coffee House -- Ignore unavailable to you. Want to Upgrade?

To: Mohan Marette who wrote (4964)	7/7/1999 9:34:00 AM
From: Mohan Marette	Respond to of 12475

New Telecom Policy approved,FM stations to go private,Disinvestment of PSUs (courtesy:Equitymaster) New Telecom Policy approved - finally!, The Union Cabinet yesterday approved a telecom bailout package that allows existing licensees of all telecom services, to migrate to revenue sharing. These telecom services include basic, cellular, paging, and other value added services. Basic and cellular telecom operators will have to start paying 15% of their gross revenue as licence fee as an interim measure immediately after they migrate to the new regime. This is in case the Telecom Regulatory Authority of India (TRAI) fails to give its recommendations on the percentage of revenue share by July 31, 1999. This will be subject to subsequent adjustments when the government stipulates exact percentages. The prospective cut off date for the new policy is set at August 1, 1999. The migration package stipulates a five-year lock-in period from the date of the licence agreement in respect of present shareholders. No transfer of shares will be permitted during this period. Importantly, the change of phrase from "shareholding" (as in the cabinet note) to "shareholders" (in the migration package" will allow fresh investors to come in, even as it bars existing shareholders from getting out. Existing operators will have to pay 35% of their total licence arrears till the cut off date July 31, 1999, as a pre-condition to migration. Relief by way of rescheduled payment of these arrears is also stipulated. Licence period has also been extended to 20 years from the existing 10 years. Both the operators in cellular circles will have to agree to migrate, otherwise both remain under the present telecom regime. The proposal for the Telecom Development Fund has also been dropped. 7 July, 1999 ==================== FM radio opened to private sector The government has opened the broadcasting sector to private commercial operators with its approval of setting up 150 new FM channels in 40 cities, outside of the All India Radio (AIR) network. As per the information and broadcasting minister, Pramod Mahajan's announcement, the channels would broadcast entertainment and information-based programmes, specifically excluding news and current affairs, The licence fee and revenue sharing arrangements for the private operators would vary from city to city and would be determined by the government. The licensees would have to adhere to the programme and advertisement standards and codes of the Prasar Bharati. The four metros- Delhi, Calcutta, Mumbai and Chennai would have 12 channels each. Thirty-six other cities have been targeted for private broadcasting. 7 July, 1999 ================ Government clears disinvestment plan The government today cleared a disinvestment programme in ITDC, Madras Fertilisers and Hindustan Latex. This move is aimed at raising Rs 100 bn for FY2000. The Cabinet Committee on disinvestment also approved disinvestment of the government's stake in MTNL, VSNL, Indian Oil, GAIL and Hindustan Zinc. In FY99, against a disinvestment target of Rs 50 bn, the government netted Rs 61.9 bn. But this was still short of the revised estimate of Rs 90 bn. Two public sector units (PSU), Indian Oil, and Gas Authority of India Ltd (GAIL), are due for disinvestment in FY2000. However the Cabinet refused to comment on the cross-holdings between the PSUs which is currently a contentious issue between the companies. The Cabinet Committee on disinvestment decided to offload 5% stake in IOC in FY2000. GAIL is the other PSU that has been targeted for disinvestment - its 180 m shares will be sold through a mixture of GDR and public issues. The government will offload its stake in Madras Refineries to 26%, from 32.7% at present. In FY2000, the government will also offload its stakes in telecom monopolies MTNL and VSNL. The Cabinet Committee has resolved to offload 19 m MTNL shares through a mixture of domestic and GDR issues. This will result in a reduction of the government's holding in MTNL from 56% at present to 51%. The government also plans to sell 1 m VSNL shares in the domestic market. Other PSUs that have been put on the block for disinvestment include: Hindustan Zinc, wherein the government has decided reduce its sake from 51% to 25%, Hindustan Latex Ltd, (a condom manufacturer) wherein the government plans to sell 49% stake, Indian Tourism Development Corporation (ITDC) wherein it plans to offload 74% stake. 7 July, 1999

To: Mohan Marette who wrote (4964)	7/7/1999 9:37:00 AM
From: Mohan Marette	Read Replies (1) \| Respond to of 12475

8 Indian Co's in Business Week's Top-200 emerging market list 8 Indian companies have made it to the Top-200 emerging markets list of the Business Week magazine. Consumer products giant Hindustan Lever (HLL) with a market value of US$ 11.8 bn, leads the Indian pack. It has been ranked number 12 on the list. Not too far behind is the tobacco giant (market value US$ 6.1 bn) ITC at number 37, followed by Wipro at No. 65, Reliance at No. 82 and India's banking giant State Bank at No. 116. Telecom giant MTNL is ranked at 121, Nasdaq listed Infosys Technologies is ranked at No. 150 and India's internet getaway service provider VSNL ranks 180 in the Top-200 list. Mexico Telecom giant, Telefonos de Mexico heads the list with market value at US$ 33.3 bn. Asia has fast emerged on the list as three out of the top five on the list are Asians, compared to just one last year. The market value of top three in the five China Telecom, Taiwan Semiconductor and Korea Electric Power stands at US$ 66 bn, nearly half of Bombay Stock Exchange's aggregate market capitalisation of US$ 130 bn. 7 July, 1999 -EM