New Delhi, November 28
Looking to resolve the issue of 3G roaming agreement between the country’s telecom operators, who have threatened to return spectrum if the pacts were annulled, the government said on Monday a meeting with the leading service providers would be held soon to work out a solution.

Even as the Telecom Commission, the highest decision making body of the department of telecommunications (DoT) met here to discuss the mergers and acquisitions (M&As) norms as suggested by the Telecom Regulatory Authority of India (TRAI), the government expects to hold talks with the leading operators over the coming days.

It will also hold discussions over the next week on proposals from the telecoms regulator on pricing of second-generation spectrum and mergers and acquisitions in the sector.

"We’ve not taken any final decision," telecom secretary R Chandrashekhar, told reporters after a meeting of the commission. “The panel will meet again on December 1 to consider the proposals”, he said.

This month TRAI proposed a relaxation of rules for M&As in the telecoms sector in a move to facilitate a long-awaited consolidation in the 15-player market, among other recommendations. The regulator had also proposed steep increases in spectrum prices and a one-time fee on spectrum beyond 6.2 megahertz.

Talking about the roaming pacts, Chandrashekhar also said: "Consultations with the law ministry have been completed. We’ll consult with telecom players before taking any final decision".

The contentious 3G roaming pacts have been declared as a violation of licence terms and conditions and the government wants to penalize the service providers for it.

DoT in its internal note has said the roaming agreement samong telecom companies for 3G services would lead to significant loss of revenues for the government. The conciliatory words from the government came after the chiefs of three leading telecom firms — Bharti, Idea and Vodafone — in a jointly signed letter had recently sought Prime Minister Manmohan Singh's intervention in the dispute over 3G roaming pact, saying else they would surrender spectrum.

The three companies had spent over Rs 12,000 crore each while trying to garner 3G spectrum in the auction held last year, but none were able to get a pan-India licence for it. This prompted them to go in for a roaming pact which allows their subscribers to have seamless 3G roaming.

However, reports suggest the telecom firms, besides violating the licence norms, would also not be able to get the advantage of the proposed provisions in the national telecom policy, 2011 that may allow sharing of spectrum among operators as they entered into an agreement for sharing spectrum before implementation of the policy.

Other service providers like Tata Teleservices and Aircel had entered into similar agreements to offer services in six telecom circles.

Meanwhile, reports also suggested the telecom ministry is likely to approach the cabinet with a proposal to waive spectrum charges of about Rs 1.2 lakh crore for the airwaves used by the defence ministry.

A draft note prepared by DoT seeks cabinet approval "for waiver of spectrum charges for usage by the defence services in bands other than 2G/3G bands amounting to Rs 118,666.59 crore for the period June 1, 2004 to May 31, 2011 for pan-India usage."

It also plans to seek waiver of spectrum charges for usage of airwaves in 2G and 3G bands amounting to Rs 1,124.69 crore, of which Rs 937.24 crore (for period from June 6, 2004 to July 31, 2009) has already been waived off by the finance ministry, while Rs 187.45 crore for the subsequent period from August 1, 2009 to July 31, 2010 remains.

The trouble between the two started when DoT dismissed the defence ministry’s demand for waiving off spectrum charges. The ministry objected to the levy of charges, saying its usage was not for commercial purpose but for national security.

New Delhi, November 28
Indian state refiners could cut retail prices of petrol by about one rupee a litre or 1.5 percent as softening Singapore spot petrol prices have offset the impact of a declining rupee, an industry source said on Monday.

The oil companies cut petrol prices by about 3.2 percent earlier this month, the first reduction in retail prices in nearly three years and the first since prices were decontrolled in June 2010.

"As per current calculations, there is scope to cut the basic price of petrol by about Re 0.85 a litre, including taxes it should be about one rupee. We have to see price movements in the next two days also before deciding the final impact," the official said on condition of anonymity.

Refiners discuss prices every two weeks and so far in this fortnight, spot FOB petrol prices in Singapore have averaged US $108.76 a barrel compared with $114.13 in the previous fortnight, according to Reuters calculations.

Oil companies had earlier this month cut petrol prices considering the rupee average at 49.30 to a dollar, an Indian Oil Corp press release said. Since then, Reuters data shows the rupee has decline to an average 51.78.

India's three state fuel retailing giants — Indian Oil Corp Ltd, Hindustan Petroleum Corp Ltd and Bharat Petroleum Corp Ltd — tend to move their prices in tandem.

Petrol is nowhere near as widely used as diesel in India — accounting for around 10 percent of fuel demand compared with about 40 percent for diesel — but it is high-profile because it powers many of the cars owned by the growing middle class.

Petrol has a 1.09 percent weighting in the inflation index and near double-digit consumer prices have provoked criticism of the government, which subsidises other fuels such as diesel and cooking gas.

The widening price gap between petrol and diesel has slowed the growth of petrol consumption, which has recently fallen behind that of diesel. — Reuters

New Delhi, November 28
Indians have emerged as the second most confident people about their economy, across the world, on account of higher consumption and increased foreign investment, according to a report by research firm Ipsos. The report said that India's economic confidence grew by 6 points to 75 per cent in the month of October compared to the previous month, becoming the second most economically confident country after Saudi Arabia.

"The Indian economy has been well insulated from global economic conditions as it has been fueled by domestic consumption and the increased FDI into the country. Our economy has remained steady at a robust 8.1 per cent and this positive consumer sentiment is seen reflected in our survey," Ipsos India MD Mick Gordon said.

The report, which examined citizens' assessment of the current state of their country's economy, said that the overall global average economic confidence was down by one point to 38 per cent last month.

In terms of gains, two countries — India and South Africa — gained maximum economic confidence by five points and six points, respectively.

Individually, Saudi Arabia experienced a six-point drop to 83 per cent but continued to hold its pole position, followed by India (75 per cent), Sweden (69 per cent), Canada (66 per cent ) and China (65 per cent).

The countries at the bottom of the heap were — Hungary which lost two points and was at 2 per cent, Spain gained 2 points but was low at 5 per cent, Japan further lost two points to stood at 6 per cent, France lost 1point and was at 6 per cent and Italy was unchanged at 8 per cent. — PTI

Paris, November 28
The global economic recovery is running out of steam, leaving the euro zone stuck in a mild recession and the United States at risk of following suit, the OECD said on Monday, sharply cutting its forecasts.

The threat of even more devastating downturns looms if the euro zone does not get to grips with its debt crisis and U.S. lawmakers fail to agree a spending-reduction plan, the Organization for Economic Cooperation & Development warned.

In the absence of decisive action from euro zone leaders, the European Central Bank (ECB) alone has the power to contain the bloc's crisis, the Paris-based OECD said. In the United States, however, the Federal Reserve had little ammunition left.

While solid growth in big emerging economies would provide a boost, slumping global trade would drag on Chinese output, the OECD said. Its twice-yearly Economic Outlook forecast world growth would slow to 3.4 percent in 2012 from 3.8 percent this year.

That marks a sharp fall from its previous outlook in May, when the OECD estimated the world economy would grow 4.2 percent this year and 4.6 percent in 2012.

Struggling to contain an unprecedented debt crisis, the euro zone has already entered a recession and will eke out growth of only 0.2 percent in 2012, the OECD said, slashing its forecast from 2.0 percent in May.

The OECD said many key questions about the euro zone's response to the debt crisis remain unresolved, raising doubts about even the bloc's most solid economies, as demonstrated by Germany's difficulties placing bonds with investors last week.

"What we see now is contagion rising and hitting probably Germany as well," OECD chief economist Pier Carlo Padoan told Reuters in an interview.

"So the first thing, the absolute priority, is to stop that and in the immediate the only actor that can do that is the ECB," he added, urging the central bank to commit to a creating a cap on government bond yields as a way of calming the crisis.

With the Federal Reserve already flooding the financial system with liquidity, the U.S. central bank has even less room to act if the world's biggest economy hits a downturn. That prospect was made all the more real by the failure of Congress to agree a deficit-reduction plan, without which deep spending cuts would be triggered.

"The resulting fiscal tightening, which would come automatically, would in our view likely generate a recession in the United States," Padoan said.— Reuters 

New Delhi, November 28
Global ratings agency Moody's today said the Reserve Bank of India's limited intervention in the currency market to stymie rupee depreciation is "positive" for the country's credit outlook.

The rupee, which has slumped about 15 per cent against the US dollar in the past three months, touched an all-time low of 52.73 against the greenback on November 22. The steep fall is hurting importers as well as entities who have borrowed in foreign currency.

Noting that RBI has limited its "intervention in currency markets to periods of extreme volatility", Moody's said such restraint is credit positive.

The decision not to spend large amount of international reserves to support a higher rupee is credit positive for two reasons, it said.

"First, intervention would have expended reserves without reversing the depreciation effectively, since global risk aversion and India's widening current account deficit would have forced the rupee to fall further against the dollar despite the intervention," Moody's Investors Service said in a report.

Further, it pointed out that effective globalisation requires market participants to adjust their investment, consumption and borrowing plans as per the availability of foreign capital and import costs.

India's foreign exchange reserves stood at nearly USD 309 billion as on November 18, as per official data.

"Had authorities used official reserves to maintain the exchange rate at a level higher than dictated by market forces, they would have assisted importers and foreign borrowers at the expense of exporters and import-competing domestic producers," Moody's noted.

Such a move would have delayed or distorted private sector adjustment to global market signals.

"We expect that currency depreciation, by making imports more expensive and exports cheaper, will ultimately force an adjustment, and help narrow the current account deficit over the next few quarters," the report said.

On the other hand, sliding rupee also widens the country's already high fiscal deficit, as the scenario raises the government's petroleum products related subsidy burden. — PTI

New Delhi, November 28
Reliance Industries has sent an arbitration notice to the petroleum & natural gas ministry over the move to disallow some of the expenditure the Mukesh Ambani-led firm has made in the KG-D6 gas fields as punishment for falling output.

In the arbitration notice, Reliance stated that the move to limit the amount of expenditure the company can recoup from its flagging KG-D6 fields is illegal and outside the production sharing contract, sources privy to the development said.

The ministry was moving toward restricting cost-recovery — now at 100 per cent — in proportion to gas output from the KG-D6 fields. Its top officials and the upstream regulator, the directorate general of hydrocarbons, were discussing the amount they should disallow as expenditure and a notice was to be set to RIL soon.

However, before the notice could be sent, RIL has initiated arbitration proceeding, sources said. The notice asks the oil ministry to appoint arbitrators to decide on the issue.

Reliance has built facilities to handle 80 million cubic metres per day of gas production, but the fields are producing just about 41 mmcmd due to a fall in pressure and water ingress.

Production sharing contracts allow operators to recover 100 per cent of their exploration and production costs and do not link cost-recovery to output.

Reliance had envisaged a gas output of 80 mmcmd by 2012 from an investment of US $8.8 billion. However, current output is about half of the target and RIL has so far invested only $5.8 billion.

The oil ministry wants to "disallow expenditure incurred in constructing production/processing facilities at the Dhirubhai-1 and 3 gas (D1 & D3) fields in the KG-D6 block that are currently under-utilised/have excess capacity because of falling output".

Sources said three arbitrators are to be appointed to decide on the issue. The oil ministry and RIL would suggest the names of one arbitrator each, while there would also be a third judge appointed.

Falling pressure and water incursion have brought down output from the D1 and D3 fields in the Bay of Bengal from 54 mmcmd in March, 2010, to 34.14 mmcmd now, as opposed to the targeted 61.88 mmcmd. A further 6.92 mmcmd comes from the MA oilfield in the same licence area. — PTI

New Delhi, November 28
Owing to a sluggish trend in the stock market, at least 25 companies have called off their initial public offer plans so far in 2011, a report has said. Mostly from the real estate and power sectors, these 25 IPOs were together estimated to raise about Rs 31,000 crore worth capital to fund the companies' business expansion plans.

The BSE benchmark Sensex has lost more than 23% since the beginning of 2011 and hit its 52-week low of 15,478.69 on November 23, 2011.

"The bad mood of capital markets have led 25 companies to call off their IPOs during the 2011 calendar year. The probable amount that these companies were planning to raise was to an aggregate of Rs 31,000 crore," brokerage firm SMC Global Securities said in a report.

Even after getting approval from market regulator SEBI, these companies could not launch their IPOs within the valid period of one year from the date of approval, mainly on account of the ongoing turmoil in the capital markets.

These 25 firms having cancelled their IPOs included a host of the real estate players, such as Lodha Developers, Ambiance Real Estate, Kumar Urban Developers, Neptune Developers, BPTP, Raheja Universal and Lavasa Corp.

Besides, a number of power sector companies, such as Sterlite Energy, Jindal Power, Avantha Power and Ind Bharat Power Infra, have also called off their IPO plans. Also, the government's disinvestment programme to bring public issues of several bluechip PSUs could not take off. — PTI

New Delhi, November 28
To feed the growing appetite for luxury cars in India, Japanese auto giant Toyota will officially introduce its premium brand Lexus here in 2013 through fully imported route.

The company, which is present here through a joint venture with the Kirloskar Group, will set up separate exclusive showrooms for selling the cars and sports utility vehicles of the brand.

"Lexus is a premium and reputed brand of Toyota. We will introduce the models of this brand in India in 2013," Toyota Kirloskar Motor deputy managing director (marketing) Sandeep Singh told PTI from Tokyo.

The company, at present, is conducting a study in the market on formulating strategies to market the car, he added.

"The cars will be imported from Japan and will be sold as a completely built unit in India," he said. When asked if the company has finalised the models and their respective tentative prices, Singh said it will be announced as soon as the market study is completed.

On marketing strategy, he said, "We will have separate showrooms for these vehicles in India." Although the company has not officially launched the brand in India, some Lexus models, that are imported directly by individuals, are plying on the roads. — PTI