Telecom Prospects brighten due to favourable policies in 2013

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Telecom sector now looks stable and seems back on its feet with initial investment proposal of over Rs 11,000 cr received in 2013. Telecom sector now looks stable and seems back on its feet with initial investment proposal of over Rs 11,000 cr received in 2013.
SummaryDepartment of Telecom is hoping to annouce the new M&A guidelines.

forward," Vodafone Group's hief Executive Vittorio Colao said.

Vodafone's investment is yet to be approved by the government.

Norwegian firm Telenor brought in investment of Rs 1,000 crore in December to increase its stake in Telewings Communications to 74 per cent from 49 per cent earlier.

"As we move towards the end of 2013, we conclude that uncertainty has been reduced in the telecom industry. 2014 will likely be a year of consolidation and strengthening of business by most operators," Uninor Chairman Sigve Brekke said.

Cellular Operators Association of India Director General Rajan S Mathews said no major investment activity took place mainly because of the lack of clarity on the M&A policy.

"The EGoM has accepted the Telecom Commission's recommendation to increase the M&A limit to 50 per cent of market share. This looks positive for the industry's long-term growth," Mathews said.

The year began with the government struggling to meet the target of about Rs 58,000 crore provisioned in the budget for fiscal 2012-13 from spectrum. The Department of Telecom issued demand notices to GSM operators asking them to pay the first installment of Rs 8,115.68 crore by January 15.

Telecom operators challenged the DoT's order, like other demand notices raised by the department, and the matter is pending in court.

As per records, telecom operators owe the government Rs 17,980.77 crore in licence fee and spectrum charges, but the outstandings are under litigation.

Telecom secretary Farooqui said the department is working on a solution to address concerns of operators, especially the new framework for imposing penalty, which has been criticised by the industry as well as Telecom Minister Kapil Sibal.

"We will hopefully come out with revised penalty rules on telecom operators very soon. It will be more rationalised compared to the present structure," Farooqui said.

He added that the government is gradually addressing concerns related to the industry but at the same time there has to be a balance between compliance with rules and consumers interests.

"Telecom industry saw promising signs in 2013 with rationalisation of realised rates, sharp growth of data revenue, control on acquisition costs and churn and finally some clarity on regulatory front with auctions being announced," Bharti Enterprises Deputy Group CEO and MD Akhil Gupta said.

With fewer telecom operators in the country after the Supreme Court cancelled 122 2G licences in February 2012, mobile phone service providers were able to increase tariffs. The trend continued in 2013 with all operators, except Videocon, MTS and

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