Government plans financial probe of carriers
The Department of Telecommunications (DoT) has ordered a special audit of five privately held carriers to determine whether their revenues have been correctly reported, according to local media reports, including this one from domain-b.
The reports suggest that the carriers -- Bharti Airtel Ltd. (Mumbai: BHARTIARTL), Reliance Communications Ltd. , Idea Cellular Ltd. , Tata Teleservices Ltd. , and Vodafone India -- may have avoided paying the appropriate fees to the government by allocating some mobile revenues to alternative services.
BSNL financials shrink, inches towards IPO
State-owned operator Bharat Sanchar Nigam Ltd. (BSNL) , which has hit a bit of a growth speedbump recently, is set to report a fall in fiscal year revenues for the 12 months ended March 2009, the Minister of State for Telecom and IT, Gurudas Kamat, told the Indian Parliament's upper house Thursday. (See BSNL Struggles for Subs in May.)
BSNL's 2008/9 unaudited revenues were 349.4 billion Indian Rupees (US$7.2 billion), down from INR380.5 billion ($7.8 billion) in the previous financial year, Kamat stated, according to this Business Standard report.
BSNL's 2008/9 net profit is set to be just INR1.04 billion ($21.4 million), Kamat added. Although the minister did not provide a comparison from the previous year, BSNL documents show its 2007/8 net profit was much higher, at INR30.1 billion ($618 million).
The minister also said the government is still considering an IPO of a minority stake in BSNL, according to this Economic Times story, and that the carrier has cancelled its extensive WiMax tender because of a lack of "eligible participants." For more on the WiMax situation, see this Business Line story. (See The Make-or-Break WiMax Deal and BSNL Preps New WiMax Tender.)
Shyam takes Chinese loan
Startup CDMA operator Sistema Shyam TeleServices Ltd. has taken a $70 million loan from the Bank of China Ltd. to fund the purchase of network gear from Chinese vendor ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763), an existing supplier. (See Sistema Shyam Secures $70M Loan and Vendors Queue Up for Indian Deals .)
Sistema Shyam, which offers its mobile services under the MTS India brand, indicated it'll look for further overseas loans to fund its network rollout. It has licenses for all of India's 22 circles, or service areas, currently has about 1.35 million customers in six circles -- Tamil Nadu, Kerala, Rajasthan, Kolkata, West Bengal, and Bihar -- and has just awarded a hosted contact center deal to Tata Communications Ltd. . (See MTS India Hits 1M in Rajasthan.)
"This is the first facility arranged with an international bank and I believe that it offers a way for other large and beneficial agreements in the future," stated Sistema Shyam's CFO, Sergey Savchenko, in the operator's press statement.
Borrowing money from Chinese banks to buy equipment from Chinese vendors is likely to become a trend in the coming years: ZTE, for example, has struck up two relationships with Chinese banks by which the vendor, or the vendor's customers, can secure loans to fund expansion plans. (See ZTE Bags Another $10B in Credit and ZTE Secures $15B, Highlights R&D.)
Other news from India worthy of note:
- AirTies Wins Indian STB Deal
- Licenses for Life?
- Ericsson Upgrades Vodafone Essar
- BSNL Begins FTTH Rollout