Trai asks telcos to bring down SMS charges

In a move that could halve SMS charges, the Telecom Regulatory Authority of India (Trai) has asked mobile operators to slash tariffs voluntarily. Unlike the voice traffic, the cost component in SMS is negligible–around 2 paise. Still, SMS tariffs are either higher than voice rates or at best comparable.

Sources say Trai has held two rounds of negotiations with the Cellular Operators Association of India (COAI), the apex of body of GSM mobile operators, convincing them to voluntarily bring down the tariffs, failing which it would intervene through regulation. In fact, two years back also Trai had urged the operators to bring down SMS rates.

The average tariff for local calls is Re 1, the same as the local SMS rate, while for STD calls, the average tariff is Rs 1.50 and the SMS rate is higher at Rs 2.

To read the full article, click here..
To read the ePaper, visit: http://epaper.financialexpress.com

Idea Changes Spice Life

One of the early starters in the GSM mobile space but restricted to regional operations, the B K Modi-controlled Spice Communications on Wednesday was acquired by Idea Cellular of the AV Birla group for Rs 2,716 crore.The acquisition price is almost Rs 665 crore more than the market price. The closing price of the share was Rs 72.15 on the Bombay Stock Exchange on Wednesday. The Spice Communications scrip surged by 33% after the announcement. The company has a market capitalisation of Rs 4,9991 crore. Idea Cellular's scrip gained a 2.09% on the BSE, to close at Rs 102.05.

The development signifies that in the booming telecom sector there's no room for companies with limited operations,restricted to a few circles. Spice operates in Punjab and Karnataka circles.

Idea has acquired the Modi family's stake of 40.8% in Spice at Rs 77.30 a share, much above the expected Rs 62 a share.Idea said it would merge Spice with itself through a share swap where Spice shareholders would get 49 Idea shares for every 100 Spice shares held. It will also pay an additionalRs544croretoModi as non-compete fee.

The acquisition of Spice would give Idea straightaway two existing circles of Punjab and Karnataka with a subscriber base of 4.4 million.Currently, Idea is present in 11 circles and has a user base of over 26 million. It has licences for there mining circles.

Further, Idea along with Telecom Malaysia International (TMI), which holds 39.5% stake in Spice, would make an open offer for additional 20% stake in Spice at the same price at which Idea has bought the Modi family's share.

To read the full article, click here...
To read the ePaper, visit: http://epaper.financialexpress.com