FinMin seeks 100% hike in reserve price for 3G spectrum

Date : Jan-02-2009 10:25
On Thursday, the Finance Ministry asked the Department of Telecom to double the reserve price for pan-India 3G spectrum to Rs 4,040 crore.

The Ministry of Finance, in a note sent to Siddartha Behura, Telecom Secretary, said, “The reserve price may be increased from Rs 2,020 crore to Rs 4,040 crore for a pan-India allocation of two blocks of five MHz of 3G spectrum”.

However, the Finance Ministry has asked DoT to modify the note incorporating the revised prices before bringing it to the Cabinet Committee on Economic Affairs (CCEA).

On the other hand, the Finance Ministry has also asked to double the reserve price for wireless broadband services to Rs 2,000 crore for pan-India allocation.

DoT early this week had issued revised schedule for auctioning the 3G spectrum. However, the sources said that the Finance Ministry has also questioned the rationale of limiting the auction of only four slots of spectrum in each circle.

Major carriers announce more fare cuts, freebies

Date : Jan-03-2009 14:58
On Friday, Kingfisher Airlines announced cut upto 65 per cent in domestic fares, while on the other hand the other airlines including IndiGo and Jet announced fresh concessions.

Kingfisher announcing the cut in the range of 21 per cent to 65 per cent, said the new tariff was effective January 1. Following the continuous fall in jet fuel prices, Air India was the first to announce an reduction up to 82 per cent in basic fare effective January 1, while rival Jet did so with effect from December 29.

IndiGo sought to lure passengers in the otherwise sagging air travel market by offering more seats for the basic price of Re 1 to Rs 99. But Jet beat Air India by announcing more concessions for its international flight with offers like free companion travel. Jet Airways has however also announced a host of offerings for international travelers. Under the offer, the return fare of Mumbai-Singapore in the Premier Class is available for Rs 1,01,250 for two persons. Along with this, a companion free offer with a return Premier ticket worth Rs 94,500 is available on the Mumbai-Hong Kong sector. Other than this route, Jet has also announced companion free offers on the Mumbai Bangkok sector at a Premier fare of Rs 57,065. In line with this, the customers may opt for similar offers on sectors such as Delhi Bangkok, Delhi-Singapore, Chennai-Singapore, and Chennai-Kuala Lumpur and Kolkata-Bangkok.

However, Kingfisher on foreign flights is yet to decide on fare cuts. Besides this, Rs 1-99 basic fare offer by IndiGo is applicable on advance purchase of at least 21 days prior to the date of travel.

Reliance group, Tatas increase profit margins in H1 ’08-09

NEW DELHI: It pays to be big. When Corporate India is rueing over faltering bottomline, the big brothers have succeeded in bucking the trend. Mukesh Ambani’s Reliance group, the biggest in terms of sales or the Tatas, the second biggest, both have increased their margins in the first half of the current year over the same period last year when most of the smaller groups have witnessed a decline in their margins.

The aggregate net profit of Mukesh Ambani group has increased 10.2% in the first half of 2008-09 while that of 27 companies of Tata Group has risen 10.4%. The growth rate of profit of both of them has decelerated compared to the same period of 2007-08 — net profit of Reliance and the Tatas had increased 32% and 24.5%, respectively, in the first six months of 2007-08 over the same period of 2006-07 — but what is important is that amidst faltering bottomline they have managed to increase their profit.

Much of the rise in Tata Group’s profit in the current year owes its origin to the good performance of its flagship company Tata Steel which has witnessed a sharp 35.8% rise in net margins in the first half following sharp rise in turnover — net sales increased 45% during this period. The net profit of Tata Motors, however, has declined during this period as tight demand conditions resulted in a fall in unit price realisation.

Net profit of Tata Motors has declined a huge 32.3% in the first half of the current year against a 24% rise in the same period last year. Of the 27 group companies , 16 have increased their net profit in the current year. Titan Industries and Tata Coffee have more than doubled their net profit during this period.

The deceleration in profit growth of Reliance in the current year at the other end, has largely been due to sharp rise in expenditure . The net sales of Reliance Industries (RIL) have grown by a huge 40.3% in the first half of the current year, but its total expenses have grown 47.2% during the same period following higher crude prices.

The raw materials cost of RIL, which accounts for more than 90% of its total expenses , have increased 67% during this period. The company has, however, still managed to increase its net profit by over 10%.

But if the Tatas or Mukesh Ambani group have managed to increase their bottomlines despite disproportionate rise in expenses , the Aditya Birla Group has witnessed a marginal decline in net profit in the current year. The aggregate net profit of nine Aditya Birla group companies has declined 0.8% in the first half of the current year against a massive 35.7% rise in the same period last year. The aggregate total expenses of these companies have grown 20.8% against 16.5% rise in net sales.

The group has witnessed a reversal despite good performance of its flagship company, Hindalco Industries. The net profit of Hindalco has increased 14.1% in the first half of the current year. Aditya Birla Nuvo too has recorded a more than 20% rise in net profit during this period. But poor performance of the cement companies, UltraTech Cement, Grasim Industries and Shree Digvijay Cement has affected the groups’s performance. The net profit of all these three companies has declined in the current year.

Many of the smaller business groups have done worse. RPG Enterprises, BK Birla, Videocon, Kirloskar, Dalmia, Thapar and Godrej have witnessed a decline in their net profits in the first half of 2008-09 over the corresponding period of last year. In fact, of the 42 business groups included in the study, as many as 23 have witnessed a fall in net profit in the current year while four others have incurred a net loss during the period.

Source: http://economictimes.indiatimes.com/Reliance_group_Tatas_increase_profit_margins_in_H1_08-09/articleshow/3924791.cms

ICICI Bank finally cuts home loan rates

MUMBAI: ICICI Bank has finally brought down its interest rates on home loans both for existing as well as new customers by 0.5%.

In a statement issued here the bank said that it has effected a reduction of 0.50% in its Floating Reference Rate (FRR) for home loans with effect from December 31, 2008. The revised FRR will be 13.75% p.a. as against 14.25% p.a. at present. All existing home and auto loan customers on floating interest raes will benefit from this reduction.

Existing home loan customers are likely to get almost immediate benefit as the interest rates for most customers are reset on the 1st day of every quarter. The bank has also announced a reduction of 0.50% in its Benchmark Advance Rate (I-BAR). The revised I-BAR will be 16.75% p.a. as against 17.25% p.a. at present.

The cut in rates is not likely to impact the bank's interest rate margins as the bank has also announced a reduction in interest rates for various tenors of retail Fixed Deposits by 0.50% to 0.75%.

Last week, State Bank of India, the country's biggest lender, said it would slash its lending rate by 75 basis points from January 1.

The Reserve Bank of India has cut its main short-term lending rate by 250 basis points to 6.5 percent since October as the economy showed signs of slowing more than many had expected

Source: http://economictimes.indiatimes.com/articleshow/3922405.cms