Regulatory moves to boost India telecoms sector in 2014: report

Indian telecoms authorities are planning to introduce new rules on mergers and acquisitions in January, aimed at providing a further boost to the country’s telecoms industry.

According to a report from the country’s Business Standard newspaper, the legislation on mergers and acquisitions is to be followed by the publication of a new policy on machine-to-machine communications in the first quarter of the year.

Moves already made by Indian regulatory authorities have led to a considerable improvement in the operating environment in 2013 compared with 2012.

These have included the de-linking of spectrum from operating licenses, the introduction of so-called Unified Licenses and the raising of limits on foreign direct investment, allowing overseas players to own as much as 100% of an Indian operator, compared with just 74% previously.

The UK’s Vodafone (Newbury) has already responded to that move by applying to increase its stake in Vodafone India from 64.38% to 100%, although its proposal has yet to be approved by government authorities.

Nevertheless, India’s big players have recently reported earnings improvements after several quarters of decline.

For the three months ending September, Bharti Airtel (New Delhi, India) flagged a 10% increase in revenues, to INR213.2 billion ($3.4 billion), and a 15.1% rise in earnings before interest, tax, depreciation and amortisation, to INR68.3 billion, compared with the same period of 2012.

“Mobile internet is now a major engine of growth for Airtel across all geographies,” said Sunil Bharti Mittal, Bharti Airtel’s chairman, in discussing the improvements.

Meanwhile, Vodafone reported a 2.5% increase in service revenues at its Indian unit, to £947 million ($1.56 billion), over the same period.

Further policy moves would clearly help operators to sustain their newfound momentum in 2014.

The Business Standard estimates the market has already received investment commitments of INR110 billion in 2013, having seen foreign investment in the sector drop by 96% in 2012.

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