07.08.2008

• MVNO entry into India
• TRAI asked the government to allow Mobile Virtual Network Operators (MVNOs) into the country. MVNOs' business model involves buying air time from existing operators and then selling it under their own brand, to launch services in India. This will enable firms to offer mobile services without owning cellular networks.
• Companies such as the UK’s Virgin and BT Mobile and Japan’s KDDI have based their telecom strategy on the MVNO model. At present, there are 360 MVNOs operating globally.
• TRAI has recommended that entry fee for MVNOs be fixed at a maximum of Rs 5 crore for Metro/Category A, Rs 3 crore for Category B and Rs 1 crore for Category C service areas.
• This implies that an MVNO will have to pay a maximum of Rs 75 crore for launching nationwide MVNO services in comparison to the Rs 1,651-crore entry fee paid by an operator who sets up its own physical network throughout the country.
• TRAI’s recommendations, which stand a good chance of being accepted by the government, will have major implications.
• First, global telecom majors who missed the India growth story will get a second chance to enter the country through the MVNO route. An entry into the country as a virtual operator will help save the time it takes to set up physical networks across the country.
• Besides, it will enable them to roll out services in specific zones, say only in the metros and large cities, and focus on particular segments of the population.
• Lastly, with the government unveiling the roadmap for the introduction of high-end services on mobile (also called 3G), MVNOs can selectively offer high-end services in this space.
• Language lessons: skid row
• “Mid-size cars on skid row.” So read a headline today. What’s meant by skid row? This is what I found out in the dictionary.
• A city district frequented by vagrants and alcoholics and addicts.
• An especially dilapidated section of a city, characterized by run-down or abandoned buildings, alcoholism and homelessness, and vices such as drug dealing and prostitution.
• The author of the report was using this phrase in the context of poor performance of the mid-size car market. Though I have my own reservations in using this phrase in the context in which it was used, there is a thing which is informally referred to as ‘journalistic licence’ that makes journalists use phrases the way they want.
• DoT clears 3G lines for BSNL, MTNL
• Within days of 3G policy announcement, the Wireless Planning and Coordination (WPC) wing of DoT has cleared the proposal to allot 3G spectrum to state-owned telcos — BSNL and MTNL. The WPC is responsible for allocation of radio frequencies to telcos.
• BSNL and MTNL will be able to launch 3G services by the year-end, while private telcos are likely to come out with similar offerings only by mid-09.
• Foreign re-insurers to be allowed into the country
• The government is moving towards allowing foreign re-insurers by bringing an amendment bill.
• Presently General Insurance Company (GIC) is the only re-insurer in the country. The company had a net owned fund of Rs 4,822 crore as on March 31, 2006. Global asset base of GIC as on March 31, 2006 stood at Rs 27,038 crore.
• Entry of foreign players in the reinsurance segment would benefit the general, life and health insurance companies who would be able to negotiate better premium. Foreign companies including Lloyd’s of United Kingdom (UK), Swiss Re can set up their branches in the country.
• India-ASEAN FTA in concluding stage?
• The trade negotiations committee (TNC) comprising top officials from India and the ten-member bloc is meeting, probably for the last time, today in Brunei to give a final push to the FTA and seal the deal.
• The FTA is now scheduled to be implemented from January 1, 2009 after it is ratified by the governments of all ASEAN member countries and India. The FTA negotiations, launched in 2003, were initially scheduled to be concluded by 2005-end.
• The FTA talks had reached a stalemate last year due to disagreement over reduction of import tariffs on palm oil by India. Malaysia and Indonesia, the world’s two biggest exporters of palm oil, wanted India to make steeper tariff reduction commitments in both crude palm oil (CPO) and refined palm oil (RPO). In January this year, India offered to reduce tariffs on CPO to 43% and RPO to 51%, which the ASEAN agreed to.
• When the agreement looked ready to be sealed, Indonesia raised a new demand that tariffs on CPO should be reduced to 20% and RPO to 30%, which created a fresh hindrance. Indonesia also presented a big negative list of items which it wanted to be excluded from the FTA.
• What are the factors that ensured that the world economy did not go broke in the wake of the subprime crisis?
• If you are asked such a question, the following excerpt from today’s article by TT Ram Mohan is a good answer:
• Several factors have kept the world economy from keeling over (meaning: going belly up). The Fed has bailed out large financial institutions and has been quick to provide liquidity even to investment banks.
• The US treasury has provided a large fiscal stimulus.
• Central banks have coordinated their actions well.
• Many banks in the western world have managed to raise capital from emerging economies to offset their losses.
• Emerging economies, whose weight in the global economy has increased over the years, have sustained growth thanks to strong domestic demand.
• Know about pair trading strategies while playing stock markets?
• Look at this educative piece. Worth a read.