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The telecom saga continues...

The Telecom Ministry will start awarding start-up spectrum to new wireless telecom operators, Solicitor General Goolam Vahanvati said during the hearing of COAI's petition against the new spectrum allocation norms. Carriers with dual-technology licenses, including Reliance Communications (RCOM) may now be given spectrum to launch nationwide GSM services, Vahanvati said. Vahanvati also said that Tata Teleservices' application for use of cross-over technology would also be considered favourably. The TDSAT refused to stay the issuance of new spectrum to companies who had applied before Sept. 25. TDSAT Chairman Arun Kumar said this was a matter of pubic policy and that he would let the Government decide on it. The telecom tribunal said the next hearing on the dispute over the allocation of additional radio frequencies and use of crossover technology will now be held on January 9.

Prime Minister Dr. Manmohan Singh said spectrum should be allocated in a transparent and equitable manner to new entrants for encouraging competitiveness. Telecom Minister A Raja ruled out auctioning of 2G spectrum to the new players to maintain level playing field between new and existing service providers. He was responding to recent offers from Bharti Airtel and Idea Cellular for 4.4 MHz additional spectrum. While Bharti offered Rs26.5bn reserving the right to increase the bid further, Idea said it was ready to match the amount paid by RCOM.

Meanwhile, the DoT reportedly cleared a proposal to award outstanding 2G spectrum to Vodafone Essar, Idea Cellular and Aircel, in circles for which they already have the requisite licences. The DoT also rejected the offer by Bharti Airtel and Idea to pay Rs26.5bn and Rs16.5bn for 4.4 MHz of 2G spectrum across the country. Separately, a financial daily reported that the Government was considering a plan to fix a one-time entry fee for all new players who plan to offer 2G mobile services. This start-up fee will be in addition to the Rs16.5bn entry fee. In a related development, RCOM is believed to have filed a caveat in the Delhi High Court to ensure the court hears its side in the event of rival GSM-based mobile operators challenging telecom tribunal's decision on new licences and spectrum allocation.

Industrial output growth accelerates in October

India's industrial production rebounded in October after two months of slackness, as demand increased from consumers as well as companies. October generally marks the beginning of a pick up in economic activity. The Index of Industrial Production (IIP) stood at 261.50, which is 11.8% higher compared to the level in October 2006, the Government said on Wednesday. The IIP had expanded by 4.5% in the same month last year. Industrial production grew at the fastest pace in seven months in October. Economists had forecast a 10% growth in the industrial output for October. The Government also revised upwards September's IIP growth, to 6.8% from the provisional estimate of 6.4%.

Most of the improvement in the IIP in October was due to manufacturing, which grew by an impressive 13.3% versus just 3.8% in the same month last year. At the same time, mining sector output fell to 3.7% from 5.9%, and that of electricity was down at 4.2% as against 9.7% in October 2006. The cumulative growth in IIP during April-October 2007-08 was 9.7% as against 10.1% in the corresponding period of the pervious fiscal year. Year-to-date, manufacturing sector's output was slightly down at 10.4% compared to 11.1% last year. Production in the mining sector grew by 4.8% versus 3.6% last year. Output of the electricity sector expanded by 7.2% as against 7.1% last year.

In terms of industry, as many as 16 out of the 17 groups showed a positive growth during the month compared to the corresponding month of the previous year. ‘Wood & Wood Products’ registered the highest growth of 73.7%, followed by 34.2% in ‘Other Manufacturing Industries’ and 32.2% in ‘Leather & Leather Products’. On the other hand, ‘Metal Products & Parts’ witnessed a negative growth of 19.8%. Growth rates in Basic Goods, Capital Goods and Intermediate Goods was 60.2%, 20.5% and 14.2%, respectively. Consumer Durable and Consumer Non-durable recorded growth of 9.3% and 13.9% respectively, with the overall growth in Consumer Goods being 12.5%.