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Did Vodaphone pay a fair price?
Sunil Jain | October 31, 2005
At the outset, Sunil Mittal needs to be congratulated on getting Vodafone to pick up a 10 per cent stake in his Bharti Tele-Ventures Ltd as this has put the mobile telephone business well into the stratosphere.
And of course, getting two telecom giants (Vodafone and SingTel) into one company is another major coup -- most people have trouble enough managing one partner, Mittal's had five, starting with Vivendi, British Telecom, Telecom Italia, SingTel and now, Vodafone.
Vodafone buys 10% stake in Bharti
Till the deal took place, valuations were a lot lower. In July this year, Hutch-Essar bought out BPL Mobile at a price of $570 per subscriber, which means the entire Hutch-Essar combine with 12 million customers is valued at around $6.8 billion or Rs 31,000 crore (minus BPL's 2 million or so customers, the company would be worth $5.7 billion or Rs 26,000 crore).
A fortnight ago, Essar bought Max Telecom's remaining 3.16 per cent stake in Hutch-Essar for Rs 657 crore (Rs 6.57 billion), implying that the value of Hutch-Essar (minus BPL) is around Rs 21,000 crore (Rs 210 billion), a valuation in the same range as the earlier deal.
Vodafone's purchase price, however, values each of Bharti's subscribers at 75 per cent more, or around $1,000, and so Bharti is currently worth $15 billion or Rs 67,000 crore.
Given that Airtel's EBITDA in the mobile business is around a fourth more than that of the entire Hutch-Essar combine (Hutch-Essar's earnings are around $45 million a month as compared to Bharti's $55 million), the price of BTVL's mobile business should be around $8.5-9 billion if the Hutch EBITDA-multiples are used.
Of course, you now need to factor in Bharti's long-distance and other revenues such as those from the landline and broadband business -- based on Bharti's latest EBITDA results, these are around Rs 1,000 crore (Rs 10 billion) for a full year.
None of this, however, takes you anywhere near the Vodafone-based valuation of $15 billion. More so, since at the end of the day, the long-distance telecom business will lose a lot of its profitability once the regulator finally moves on the obvious cartelisation in the segment.
In any case, at Rs 25 crore (Rs 250 million) for a licence, the entry barriers in this segment are not too high. While the telecom minister has openly alleged cartelisation and wants to break this up, the regulator is moving very slowly on issues like the carrier access code, essential if genuine competition is to happen.
What is even more surprising is that Vodafone should pay such a high price to get into a market that is in a bind right now for several reasons. While the cellular industry growth has been at a phenomenal rate over the past few years, there is a question mark over whether this can be sustained.
A study by the Gurgaon-based Management Development Institute, for instance, is of the view that the number of mobile subscribers will saturate at around 100 million.
While many in the industry dispute the S-growth theory the MDI uses (Arun Sarin of Vodafone, by the way, talked of S-growth on national TV after the deal), there is no doubt that the metros are already saturated.
By way of an example, in the National Capital Region, which includes Delhi and has around 22 million people (assuming that young children and very old persons may not be given a mobile phone ever), the addressable population is probably around 11 million (we're assuming, incorrectly, that all of them can afford such phones).
Well, there are already around 6.4 million mobile subscribers in the NCR. The situation in Mumbai is quite similar. The solution is then to move to smaller cities (this is where the real growth is coming from today) and perhaps rural areas.
But moving to smaller towns and rural areas means lower average revenues per user—for new subscribers, monthly industry-ARPUs have fallen from Rs 300 last year to around Rs 200 now, and the telecom regulator is talking of ARPUs of Rs 180 for rural areas.
The other constraint, of course, is the lack of spectrum airwaves on which mobile phone companies transmit and receive signal from users.
Without adequate spectrum, the growth of mobile phone companies is seriously compromised -- how serious this is can be seen from the fact that this is among the priority agenda points for President Bush's visit in February.
It doesn't help that, so far at least, the US administration has been seen to be weighing in favour of the CDMA-group headed by Qualcomm -- so, if the Indian government actually bends, the GSM-group, which includes Bharti, will be adversely affected.
Given all this, why has Vodafone paid such a high price -- around 75 per cent more than that paid in a major acquisition less than three months ago? Part of the reason could be that the 10 per cent stake is a lot more than what it seems, since Vodafone will have two directors on Bharti's board, as compared to SingTel, which has only three directors despite owning a 31 per cent stake.
The market is already speculating on SingTel exiting the business -- in any case, three phone operators in one company is clearly unsustainable.
Entry of VODAFONe is good news for India. CDMA lobby till date was too strong with RELIANCE leading the pack with all their political connections.
Entry of Vodafone spells out increase in competition and a fierce battle ahead.
Unlimited calls to US @ Rs 2990 per month
October 31, 2005 17:06 IST
Shell out just Rs 2990 per month and make unlimited calls to the US and Canada. Unlimited? Well yes.
India's VoIP provider, Anyuser Telecom, a subsidiary of the Korea-based $3 billion Anyuser.Net has recently launched the scheme.
Call USA, UK at 89 paise/minute!
Other features include free voicemail, caller ID, call waiting, 3-way calling, free in-network calling, caller ID block among others.
According to Anyuser, 500 corporate customers and more than 3000 retail outlets are already using their telecom services. Anyuser plans to launch more innovative services to tap different segments of the market.
Death wish
By: Sandeep Ashar
November 21, 2005
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Too much stress? Best friends Manju Yadav and Jennifer Martis, who committed suicide at a Vasai flat on Friday evening
Four students commit suicide in three days last week. Three were school-going students, whereas the fourth was an IITian.
Is it exam pressure or plain stress that has led these teenagers to end their lives?
If an ongoing study is to be believed, every seventh school going child might have harboured suicidal thoughts on more than three occasions after being put through dreadful experiences in school.
The study, part of a global project focusing on the victimisation of children at school, was conducted among 966 students (males and females aged between 16-22) from 14 different institutions across the city. It was conducted by Dr H L Kaila, Head of Post Graduate Department of Psychology, SNDT Women’s University.
When contacted, Arundhati Chavan, president of Parents Teachers’ United Forum, said, ‘‘Caning in front of the entire class causes humiliation. This drives the student into depression. I have also come across many cases of sexual harassments by physical training teachers and yoga teachers.”
‘I wish I were dead!’
Every seventh child in school wishes he were dead: study
Sandeep Ashar
sandeep.ashar@mid-day.com
If an ongoing study is to be believed, every seventh school-going child might have harboured suicidal thoughts on more than three occasions after being put through dreadful experiences in school.
Among 884 students, 234 (more than 26.7 per cent), claims the study, admitted to a day in school where they felt like dying. 15 per cent (every seventh child) reported the trend thrice or more.
“We counted the latter as a more authentic statistic for it was repeated more than thrice. The feeling lasted for more than a month in some cases,” Dr H L Kaila, Head of Post Graduate Department of Psychology, SNDT Women’s University, who conducted the study, said.
Worst experiences
Curse the day when you felt like attending nature’s call while in class, but the tutor turned down your request. You aren’t alone. 117 students (50 males and 67 females) shared the same experience.
“Once during my history class, I wanted to visit the loo but the teacher disallowed me thinking I was lying. I had to hold the call for 20 minutes. It was upsetting,” said a class IX student. Kaila said,“students were put questions on 58 worst things that could happen to them in class. Results were startling,”
Sexual exploitation
41 students (25 males and 16 females) said they fell victims to forced sex in school. Teachers exploited 11 among them. “My music teacher would try and feel me sexually. He kept on doing that many times. I tried to bunk his classes and felt scared informing my parents about it,” said Chetan ****hi(name changed), a student studying in a suburban school.
5.5 per cent of the students (one of twenty) said that they were locked in a closet for playing mischief. As per court guidelines, confining a student in a room is banned. 38 students even complained of being tied up.
Males harassed more
Surprisingly, statistics revealed that the incidences of male vicitmisation were more in most cases. Girls, however, said Kaila were more impacted by the experiences.
The study, part of a global project focusing on the victimisation of children at school, was conducted among 966 students (males and females aged between 16-22) from 14 different institutions across the city.
Arundhati Chavan, the president of Parents Teachers’ United Forum, said, ‘‘Caning in front of the entire class causes humiliation. This drives the student into depression I have also come across many cases of sexual harassments by physical training teachers and yoga teachers. Many of these cases are not reported.”
When Sania Mirza lost her cool
November 21, 2005 09:51 IST
Irked by a volley of personal questions, Indian tennis sensation Sania Mirza walked out of a press conference organised in Kochi on Sunday night in connection with a function organised by the Malabar Group of companies.
At the very start of the conference, Sania, who represents the Malabar Group as a brand ambassador, asked the media to restrain from asking personal questions.
"I had come to represent the Malabar group, a NRI jewellery group and would want to talk about the company's future plans," she said.
Sania was visibly irked when she was asked about her controversial statement on pre-marital sex, on which she had already issued a statement clarifying her position. Sania last week denied making any statements in support of pre-marital sex.
"If you have not seen (the statement), it is not my problem," she said before walking out of the press conference.
The incident left the organisers and co-ambassador and Malayalam film star Mohanlal in a spot of bother.
Though Mohanlal tried to defend Sania's action, he failed to calm the frayed tempers and the conference wound up abruptly.
The conference was convened to announce the diversification plans of the Rs 600 crore Malabar group into housing and commercial complex sectors in various parts of Kerala besides entering the diamond jewellery business.
Watch live TV on cellphones soon
Sunil Batra in Sydney | November 21, 2005 13:52 IST
Even as the convergence in telecom, IT and broadcasting is yet to see light of the day, cellphone major Nokia is ready to bring true digital convergence through its new multimedia devices.
While launching three new handsets, Nokia's senior management team said many developed countries have implemented the policy of allowing live television on mobile phone and hoped that India would also follow the same.
"India is one of the fastest growing nations and a largest telecom market. We are excited to offer three very exciting mini-computers for consumers' pockets," M Montanaro, vice president, multimedia, Asia Pacific said.
Two new devices would be available in India and other Asia Pacific markets in the first quarter of 2006 while third handset N92 would be made available in countries where Digital Video Broadcasting-Handheld (DVB-H) is allowed in mid-2006.
Asked whether Indian service providers were ready to offer DVB-H to their consumers, Montanaro said, "We are keeping a close look at the Indian market... offering DVB-H needs regulatory clearances."
The Nokia N92 is the world's first mobile device with a built-in DVB-H receiver, making it possible for users to watch and record live TV at any time.
Based on open standards, DVB-H is the leading mobile-TV broadcasting technology, enabling low cost delivery of high-quality broadcast programs to mass audiences, he said.
The other handsets N71 and N80 come with solutions to meet the needs of consumers in the areas of mobile photography, music and media. These devices include advanced technologies such as 3G and features like Internet browser, e-mail and bluetooth connectivity.
All three multimedia devices were showcased for the first time in the Asian Pacific markets.
"With content digitalisation and Internet services changing the world around us, today's consumers expect immediate access to information to purchase content and to share experiences. The Nokia Nseries offers these same experiences packed into powerful devices which fit into their pockets," Mantanaro said.
These mobile multimedia computers have comprehensive functionality, different from traditional mobile phones, he added.
Guess who is the favourite of Miss Universe in Bollywood
22nd Nov 2005 09.25 IST
By Agencies
'Miss Universe 2005' Natalie Glebova on Monday said she was keen to act in Bollywood films, if good roles come her way. But there is one person in Bollywood who is her favourite.
"I definitely will love to experiment with films. I am definitely interested in them," Natalie, who arrived in Kochi Monday evening for a three-day AIDS Awareness campaign, told a press meet.
And her favourite in Bollywood is none other than superstar Salman Khan , who has romanced as all know former Miss World Aishwarya Rai .
Hollywood designer turned actor Anand Jon is also her favourite, she said.
On her impression about India after her visits to Delhi, Mumbai and Bangalore, she said she had had a wonderful experience. She would love to shop for some ethnic Indian jewellery, bindis and traditional Indian stuff.
About the secret of her success, Natalie, a rhythmic gymnast, who is of Russian origin and has settled in Canada, said her parents had got her interested in many activities, which had helped her in life later.
Natalie was a classical pianist and composer and had studied in the professional Music school in Russia. Her other interests, include outdoor sports such as biking, rollerblading, swimming and ballet.
Natalie would interact with mentally challenged children at the Gymkhana club, and participate in a stage show at the Toc H School on Tuesday. A musical entertainment programme would be performed by singer Usha Uthup and visually challenged persons. On November 23 and November 24, she will visit Kumarakkom, Cherai and Fort Kochi for sightseeing.
International designer Sanjana Jon and seven models from the US would host fashion shows as part of the AIDS awareness campaign.
Airfares at incredibly low rates
P R Sanjai in Mumbai | November 22, 2005 10:10 IST
Last Updated: November 22, 2005 10:32 IST
Looking for an attractive option to travel to a business or a holiday destination? Longing to catch a glimpse of the endless blue sky and greeny earth through a bird's eye?
Indeed, now 'sky is no limit' for you as air travel is possible with just Re 1 or may be even with a free ticket. Thanks to low-cost airlines which are committed to demystifying air travel in the country by offering lowest airfare and connecting hitherto unconnected cities.
Since these airlines are targeting passengers travelling on air-conditioned firs-class and second-class train tickets, they are empowering almost anybody to fly.
Private no-frill carriers such as Air Deccan, SpiceJet, Paramount Airways and GoAir are setting air travel on fire, revolutionising the levels of low airfare, while many more are raring to go -- fly into the Indian skies.
Air Deccan, which kick-started the no-frill revolution, is now connecting 40 destinations with 170 flights a day. Amazingly, Capt G R Gopinath-promoted Air Deccan's airfare starts at just Re 1 for Airbus flights while it is Rs 500 for ATR flights.
"For every flight, there are Re 1 and Rs 500 ticket options, which are offered on a first-come-first-serve basis. So far, Air Deccan has given over 5,000 Re 1 tickets and 1.5 lakh Rs 500 tickets," said a senior company executive.
Other than the well-established routes, Air Deccan's destinations include cities such as Madurai, Vijaywada, Dibrugarh, Baghdogra, Guwahati, Jabalpur, Vaishno Devi, Bhavnagar, Kolhapur, Belgaum, Hubli, Nasik, Surat and Mangalore.
SpiceJet, a rising low-cost carrier, is offering low "everyday spicy fares" and friendly services to its travellers. It operates 38 daily services in 11 markets -- Delhi, Mumbai, Ahmedabad, Goa, Pune, Bangalore, Kolkata, Jammu, Srinagar, Chennai and Hyderabad -- utilising modern B737-800 new generation aircraft with an all-economy configuration of 189 seats.
SpiceJet offers Chennai-Mumbai at Rs 1,799 and Hyderabad-Kolkata Rs 1,999, while the promotional fares for these routes are in the range of Rs 999-Rs 1,599.
The airline offers Delhi-Chennai at Rs 2,199 (promotional fares are in the range of Rs 1,999--Rs 2,499), Hyederabad-Chennai at Rs 1,399 (Rs 999-Rs 1,299) and Kolkata-Chennai at Rs 1,999 (Rs 1,799-Rs 1,899).
Meanwhile, Coimbatore-based start-up airline Paramount Airways is offering an introductory fare for Chennai-Coimbatore at Rs 2,222 against Rs 7,000 offered by full-service airline.
The airline is offering Rs 999 to Kochi-Coimbatore service against Rs 5,000 offered by others, and it also offers point-to-point fares to Chennai-Kochi (via Coimbatore) at Rs 2,500 against Rs 6,900. The Coimbatore-Delhi and Kochi-Delhi service starts from Rs 7,999.
Paramount Airways managing director M Thiagarajan informed the airline has made necessary arrangements for easy availability of tickets.
"We have a toll-free number and internet booking facility for securing flight ticket. Moreover, we have widespread travel agents for selling tickets as the airline encourages revenue-sharing model with them," he said.
Significantly, passengers have to pay additional Rs 221 as passenger service fees (PSF) on published airfare.
The Wadia group-promoted low-cost carrier GoAir took off on November 4 with scheduled services to Goa, Ahmedabad and Coimbatore from Mumbai. The airline offers Mumbai-Goa and Mumbai-Ahmedabad at Rs 999, while Mumbai-Coimbatore at Rs 1,699, which includes PSF of Rs 221.
"The airline aims to be the lowest-cost carrier in India and will provide passengers with a comfortable and affordable option to popular holiday and business destinations in India. The fares will be 40 per cent lower than that of traditional airlines and, on an average, 10 per cent higher than air-conditioned first-class and second-class railway fares," GoAir executives said.
Besides, GoAir is offering Rs 10,000 (only taxes Rs 221 applicable) GoAir Free Fare over a period of six months with a limited stock availability on a per-day basis. The airline also offers savings up to Rs 100 on all internet bookings.
Interestingly, passengers, who do not have the luxury of a credit card, a debit card or even a computer, need not have travel distances to book their tickets but can access them from GoAir's distribution mediums that include travel agents, customer care centres, internet options, Tata Indicom centres, Inlott centres and channel partners.
"The four initial routes have been chosen keeping in mind the high amount of traffic to these destinations. GoAir is considering more routes like Bhavnagar, Aurangabad, Kholapur, Rajkot, Jammu, Bhopal and Maduari, among others, at competitive prices," the executives said.
The United Arab Emirates-based Air Arabia, the first international low-fare airline in India, meanwhile, has added an additional daily flight between Mumbai and Sharjah from December 1 to January 31 to cater to increasing demand over the winter holiday season with fares starting from Rs 3,750.
According to Air Arabia country manager Rohit Ramachandran, the flights to the UAE have been extremely popular with business and leisure travellers from Mumbai.
"The winter is a peak travel time, with people travelling between the UAE and India to visit family friends, and we are offering them more flight choices at an affordable fare for Mumbaikars to travel to the UAE for the Dubai Shopping Festival," he added.
Climb up Rajabai Tower this year
By: Kiran Tare
January 13, 2006
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As part of its 150-year celebrations, Mumbai University will repair Rajabai Tower, one of the city’s most famous Gothic landmarks, and open it to the public. The clock tower has been closed to the public for many years now and is unsafe at the moment.
Abhay Pethe, spokesperson for the 150-year celebra- tions committee, said, “The university plans to open the Rajabai Tower for visitors in a year. We aim to complete the repairs within eight months.”
Broken windows, dangerous birds
The windowpanes below the clock of the tower are broken. Also, there are some dangerous birds living on the staircase, which leads to the top of the tower. Vice-Chancellor Vijay Khole came face-to-face with the birds when he tried to reach the top of the tower, last year.
Looking for funding
The university has approached the successors of Premchand Roychand for funds. Roychand, a banker in the 19th century, was also known as the ‘Cotton King’. He funded the construction of the tower in memory of his mother Rajabai.
Said Pethe, “Our task will be easier if the Roychand family agrees to fund the project. Then we would only have to consult the technical committee of the university. Our other option is to use the funds granted by the government for the 150-year celebrations. But for that we need to get permission from the finance committee, the building works committee and the management council.”
The tower needs care
Conservation architect Vikas Dilawari feels only skillful repair and periodic maintenance and can ensure that this landmark stands forever. “There is leakage in the tower at some places. If it is not repaired soon, it will lose its glamour,” he warned. Dilwari had worked on restoration of the building in 1999, which bagged the Global Conservation Heritage Award from UNESCO in 2001.
An engineering marvel
The construction of the 280-foot high Rajabai Tower was completed in 1878. Built by Sir George Gilbert Scott, an English architect, and modelled on the Big Ben, it was the tallest building in Mumbai.
It is adorned with oriental figures. In the old days, it used to play Rule Britannia, God Save the King and a Handel Symphony among 16 other tunes that were changed four times a day.
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