MTNL set to franchise CDMA services, too

In a tacit admission of its lack of marketing prowess in the fiercely competitive telecom arena, state-owned MTNL is increasingly franchising out services in the otherwise highly lucrative Delhi and Mumbai circles in the hope of shoring up its flagging bottomline.

Its latest move has been to invite expressions of interest from potential franchisees to market its CDMA services, currently offered under the Garuda brand. Up until two years ago, CDMA services were a low priority for MTNL as they offered limited mobility. The company has less than 5 lakh mobile users on the CDMA platform.

However, in October 2007, while clearing the dual-technology policy, the government also allowed BSNL and MTNL to offer fully mobile CDMA services. Since then, their interest in these services has perked up.

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India-Lanka undersea link project on course

Undeterred by the ongoing war by LTTE, the governments of Sri Lanka and India are going ahead with the implementation of an ambitious Rs 1,000 crore under sea transmission link project between the two countries. As reported by FE on April 13, both the governments have given top priority to this project and are expected to sign an MoU soon, which will pave for an appointment of an agency to carry out a comprehensive undersea/marine survey. The proposed survey is like to be completed in six months and there after, a detail project report will be prepared.

The proposed undersea/marine survey is necessary, prior to the laying of the undersea/submarine cables. The cable survey will look into the traffic of movements of ships in the area, depth of sea, earthquake zones and volcanic actives as well as the presence of sharks in that area of sea. The link is likely to connect Madurai in Tamil Nadu and Anuradhapura in Sri Lanka’s North Central Province. The transmission line is expected to be 400KV HVDC overhead lines from Madurai to the Indian coast (near Rameshwaram(139km), a 400 KV HVDC cable from the Indian sea coast to the Sri Lankan sea coast (39 km), a 400 KV HVDC overhead line from the Sri Lankan coast to Anuradhapura/Putta lam (125km). PowerGrid Corporation,which is India’s central transmission utility, will be the project implementation agency.

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Price rise tactics shift

Slashing interest rates on NRI deposits and splitting the commodity market into priority and non-priority segments form, inter alia, the government's latest blueprint to tame inflation. Moving away from the sledgehammer tactics of price control, the Centre is now planning to adopt a more nuanced approach.

It is, therefore, considering paring interest rates on Foreign Currency Non-Resident (B) Accounts from the current 5.5-6.5%.

The rates were originally aligned to Libor (the London inter-bank overnight rate), which has since eroded to 2.5%, as of Wednesday. Government officials said there was fresh room to narrow the differential, especially after interest rate cuts by the US Federal Reserve.

Speaking about the possible change, HDFC Bank chief economist Abheek Barua said though the interest rate differential did matter, currently arbitrage possibilities were limited. "However, if the government sees an excess inflow of money through private remittances or NRI deposits, especially since NRI deposits are arbitrage driven, they can tweak the rates by closing the margin to control this inflow," he said.

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