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Tag: Jio Infocomm

  • Import tariffs hike to hurt telcos’ network expansion: Report

    Import tariffs hike to hurt telcos’ network expansion: Report

    MUMBAI: The government, on Thursday, announced a plan to rein in imports and bolster a falling rupee. It will raise import tariffs on several electronic items and communication devices. The tariff hike was the second such move by the government in a two-week span according to Reuters.

    The government attempts to raise import barriers to curtail the import of goods it deems as "non-essential" items. The list including wearables like smartwatches, voice over internet protocol equipment and phones, and Ethernet switches, among other items.

    Last month, it raised import tariffs on 19 "non-essential items," including air conditioners, refrigerators, footwear, speakers, luggage and aviation turbine fuel, among other items.

    The gambit is part of a plan to contain a slide in the rupee, which has weakened more than 14 per cent against the US dollar this year, hit by a rout in emerging markets and other domestic factors such as a widening current account deficit.

    The plan, which becomes effective on Friday, will potentially also hurt Indian telecom carriers such as Reliance Jio Infocomm, Bharti Airtel and Idea, said Neil Shah of tech research firm Counterpoint.

    "This will slow down the rollout of high-speed broadband which uses optical fibre and LTE networks," Shah told Reuters, adding however that it could help local telecom equipment makers like Tata Teleservices that manufacture some of this equipment locally.

    India announced higher import tax on electronics products such as mobile phones and television sets in December, and then on 40 more items in the budget in February. These include goods as varied as sunglasses, juices and auto components.

  • Idea-Vodafone India merger creates leader with 42% market share

    MUMBAI: Britain’s Vodafone Group’s Indian subsidiary and Aditya Birla Group’s Idea Cellular, after eight months of discussion, have merged to create a new market leader better able to contest a brutal price war. The merger, expected to be completed in 2018, was necessitated due to the launch of Jio Infocomm that shook the Indian wireless telephony market with its low rates.

    Idea Cellular on Monday approved the merger with Vodafone Mobile Services Limited and Vodafone. According to a statement, promoters of Idea and Vodafone will have the right to nominate three directors each.

    The combined company would have almost 400 million customers, 35 per cent customer market share and 42 per cent revenue market share.

    According to reports, Idea Cellular will hold 25% stake in the merged company. Vodafone will hold 45.1 per cent stake, and will transfer 4.9 per cent stake to Idea founders. The merger will require regulatory approval.

    The equity value of the companies was estimated at Rs 40,000 crore each while the combined entity would have debt of around Rs 89,000 crore.

    In a BSE filing, Idea Celluar announced its approval of amalgamation of Vodafone India Ltd (VIL) and its wholly owned subsidiary Vodafone Mobile Services Limited (VMSL) with the company subject to receipt of necessary approvals of shareholders, creditors, SEBI, RBI and other governmental authorities.

    Idea release stated the proposed amalgamation may result in: Creation of the largest Indian telecom operator with widest mobile network in the country and pan India 3G/4G footprint. Sufficient spectrum to complete with major operators in the market while offering innovative priced mobile services to customers and acceleration of expansion of wireless broadband networks.

    “The combination of Vodafone India and Idea will create a new champion of Digital India founded with a long-term commitment and vision to bring world-class 4G networks to villages, towns and cities across India,” said Vodafone Group CEO Vittorio Colao.