New Delhi, June 21
Moody's today said the risk profile of Reliance Industries has increased following its entry into untested telecom space by acquiring Infotel Broadband Services, but has retained the outlook of the Mukesh Ambani-owned company.

Despite the increased business risks, the rating agency affirmed Baa2 ratings, three notches down from the highest grade, with a stable outlook for RIL, Moody's Investor Service said in its weekly outlook.

"Its strong financial balance sheet, with current cash and cash equivalents of more than $6 billion and $7-8 billion in projected annual cash flow, can easily accommodate the price tag for Infotel and the expected $2-3 billion in additional capital outlays (excluding licence fees) during the initial years," it said.

Earlier this month, RIL acquired 95 per cent stake in Infotel for Rs 4,800 crore (a tad over $1 billion), soon after the HFCL Group-promoted Infotel bagged the national licence for broadband wireless access (BWA) radio waves.

The buyout, it said, has "negative credit implications by making a strategic move into the untested but promising wireless broadband spectrum technology in the country". However, it added, RIL's move represents a big bet on the future of the highend communications market in the country.

As part of its telecom foray with the Infotel deal, RIL is opting for an unproven long-term evolution (LTE) 4G technology that has had commercial trials so far only in Norway and Sweden. Moody's further said the ADAG Group's Reliance Communications and Vodafone pulled out of the BWA auctions, citing high cost.

"Prices for 4G spectrum are about the level where 3G prices were 10 years ago when European telcos paid $100 billion for licences. Nevertheless, RIL has calculated that nationwide access to the world’s fastest-growing telecom market, which is adding up to 20 million new mobile subscribers a month, is worth the price," it said.

Moody's said RIL's increasing appetite for growth and diversification in geography, sectors, and relatively unproven technologies is also demonstrated in its shale gas deal with US-based Atlas Energy. — PTI 

Mumbai, June 21
In a bid to woo Indian students seeking admissions in various universities and educational institutions overseas, especially in the UK and the US, British Airways today announced a special offer for such students.

According to industry statistics, about 1,60,000 students from India go abroad for higher education every year.

Under the freebies, Indian students travelling abroad for studies out of Mumbai, Delhi, Bangalore and Chennai will be allowed to carry 23-kilos of free excess baggage when flying to the UK, Europe, Canada and the USA, a press note said here.

Students travelling from Hyderabad will be entitled to a discount of Rs 4,000 on all bookings, it said.

According to the airline, the offer is valid for students holding a valid student visa to the UK, Europe, the USA or Canada only and the outbound travel must be undertaken before November 15.

Any dependents accompanying the student can also benefit from the free excess baggage. The offer will also be available for students travelling to the UK for medical exams (PLAB), the note said.

Besides, the airline has also offered a range of other offers, which are worth Rs 10,000, from its partners which include American Express, Matrix and Safari luggage, it said.

"Our experience shows that students travelling abroad need to take a lot of extra baggage, especially if they are on their maiden trip. But the cost of excess baggage can be a serious problem for them. So, with this offer, we have increased the baggage limit for students and their dependents traveling with them," British Airways's regional commercial manager (South Asia) Judy Jarvis said.

As a part of the partner offer, the students will receive special forex rates on American Express Travellers Cheques with a dual time wrist watch on purchase of cheques worth $3,500 and above.

In addition, the partner-offers provide for a free call back to India from UK (free 255 minutes worth 89.23 pounds) and the USA (free 50 minutes of talk time worth $ 35) on Matrix connections. — PTI 

New Delhi, June 21
The government may allocate natural gas to Anil Ambani Group's proposed power plants like the Dadri project only six months prior to commissioning, as the reservation of gas is not allowed under the present policy.

"The Gas Utilisation Policy is very clear -- the gas, which is a precious asset, cannot be reserved for anyone," a top government official said.

"So, for anyone wanting natural gas for their plants, be it in fertiliser, power or any other sector, the allocation is to be made (to them) closer to the time when they can actually consume that gas," he said.

Incidentally, Reliance Industries chairman Mukesh Ambani last week told company shareholders that his firm would supply gas to ADAG plants as and when they were ready and it was subject to the allocation being made by the government.

"The allocations till now have been made on a non-discriminatory principal. We had not tried to give preference to any unit or company over others," the official said.

ADAG’s Dadri plant near here is two-and-half years away from beginning operations, while any expansion of its Samalkot plant in Andhra Pradesh too may not happen before the second half of 2012. A new unit that ADAG may set up by either relocating Dadri or as a greenfield project in states like Andhra Pradesh and Maharashtra, may also take 24-36 months to commission.

The UP government had in January this year started taking repossession of land given to Reliance Power in Dadri, following a December 2009 order of the Allahabad High Court that quashed the land acquisition in 2004 by the then state government headed by Mulayam Singh Yadav.

The Anil Ambani group company last week commissioned only its second 300-MW unit of the Rosa thermal power project in Uttar Pradesh since its inception. The first unit was brought on stream in December 2009.

"It will not be wise on the government's part to deny gas to a unit that is commissioning in 2010 or 2011 as it wants to allocate the gas to some other units that will come up in the future," he said. — PTI

New Delhi, June 21
Firming up on its plans for the African continent, Airtel today announced that it had appointed Ogilvy Africa BV as its marketing services partner for Africa. Having completed the acquisition of the Zain Group’s mobile operations in 15 countries across Africa earlier in the month, this is the first strategic tie-up which Airtel has made to beef up its operations in the continent which holds great promise for the telecom operator.

Ogilvy Africa, part of WPP, the world leader in marketing communications services, has set up a specialist Pan-African business unit, Team Airtel, which will be exclusively dedicated to Airtel across the continent with its existing network of offices, delivering integrated marketing services - advertising, media buying, market research and public relations.

Team Airtel will also include The Brand Union who will be responsible for brand migration, Millward Brown for market research, Hill & Knowlton and Ogilvy PR for all public relations across all markets.

New Delhi, June 21
Speculation is rife over the Anil Dhirubhai Ambani Group (ADAG) plans to sell a stake in Reliance Communications' (RCom) telecoms tower unit with conflicting reports emerging.

While earlier reports said RCom was said to be in advanced talks with Reliance Industries (RIL) to sell its optic cables and telecom tower businesses in a bid to back elder brother Mukesh’s foray back into the telecom sector, today’s reports said it may sell the tower business to GTL Infrastructure and a private equity investor.

The latest reports about the sale of tower business to GTL and a private equity investor said the sale in Reliance Infratel would be through a combination of cash and stock and would take a few weeks.

As part of the deal, 54,000 telecoms towers operated by Reliance Infratel and 32,000 GTL Infrastructure towers would be spun off into a special purpose vehicle (SPV), which would sell a stake to a private equity investor, it said.

The SPV will issue shares to Reliance Communications and GTL Infrastructure shareholders, and subsequently seek a stock market listing.

Reliance Communications was being advised by JPMorgan and GTL Infrastructure by Standard Chartered, it said.

RCom had said last week it planned to open up its telecoms tower unit to investors. It is looking to use the proceeds from the sale of tower business to clear debts.

Reports then emerged that it was in advanced talks with RIL and with Mukesh’s foray into the telecom sector with the buyout of Infotel, Anil’s first choice would be his elder brother’s company to sell the tower business. This, especially after the recent patch-up between the earlier warring brothers.

RIL has already announced plans to usher in the next level of growth through broadband and will be in immediate need for 15,000 towers for its broadband venture.

RCom has more than 50,000 telecom towers in its portfolio and around 1,90,000 km of fibre optic cable distributed across 44 cities in the country. Twice earlier, Reliance Infratel had tried to launch an IPO to raise funds, but adverse market conditions had forced it to call off the plan.

RIL has been eyeing the lucrative data market more than that of voice. With data market growing at around 70 per cent per year, easy access and leasing out options to corner fibre optic capability will be crucial for Mukesh’s RIL.

New Delhi, June 21
The government may divest up to 10 per cent of its stake in Shipping Corporation of India. "The government in its list has included Shipping Corporation (SCI) for disinvestment in this fiscal. It is likely to happen. Disinvestment could be up to 10 per cent," SCI chairman and managing director S Hajara said here on the sidelines a SCOPE conference today.

The government currently holds 80.12 per cent in SCI, while over 10 per cent is held by LIC. The remaining 3.15 per cent is already with the public.

Asked if the company could issue fresh equity, he said, "We don't know. Discussions are on...There could be some possibility but no decision has been taken as yet." Shipping secretary K Mohandas had said last month that the government was looking at various proposals for SCI, including a follow-on-public offer.

Hajara said a part of the disinvestment proceeds would be utilised for further acquisition. Asked how much SCI plans to raise from divestment, Hajara said it would depend on the market condition.

SCI at present owns 76 ships of 5.1 million DWT (deadweight tonnage) and has interests in all segments of shipping trade. In addition, it mans and manages 60 vessels of 0.2 million tonnes DWT. DWT is the total weight of the ship, including the cargo, crew, fuel etc.— PTI