STPI units eligible for IT sops

The Central Board of Direct Taxes (CBDT), a government body responsible for all matters relating to various direct taxes in India, has clarified that the tax holiday will not be denied to a unit based in a Software Technology Park of India (STPI), infrastructural facilities that promote software export industry by providing international data communication links and computing facilities, solely on the ground that approval or registration was granted to the concerned unit by the directors of STPI only and that such unit was not approved by the central government. The controversy started recently, when all of a sudden several STPI units that were enjoying tax holiday under Section 10-A of the Income Tax Act were served notices by the tax authorities denying them the deduction claimed under Section 10-A of the Income Tax Act.

Section 10-A provides for a 10-year 100% tax holiday on export profits earned by any STPI unit. Under the STPI scheme that was notified by the Commerce Ministry in 1995, STPI units required approval from the Inter-Ministerial Standing Committee of the Department Of Electronics. Based on this requirement, income tax authorities denied the tax holiday benefit to those units that are approved only by the STPI directors. The industry, however, protested the move saying the companies would not like to know what the STPI does at the back-end, and the problem aroused only out of procedures taking place between the government, the STPI, the IT Ministry, and the Inter-Ministerial Standing Committee. Now, the CBDT has said that the demand arising on the basis of STPI unit not being approved by the inter-ministerial committee should be kept in abeyance until further orders. Many tax experts, however, find this order being only a temporary relief.
Ref: Hindu Business Line, March 31, 2006

New U.K. law points at attempts to regulate outsourcing: NASSCOM

The National Association of Software and Services Companies(NASSCOM), the industry body representing more than 900 Indian IT services companies, has expressed its apprehension that the recent changes in the U.K. law that seek to protect the interests of workers made redundant by outsourcing point to protectionism taking root in that country. "The revision in the transfer of undertakings (protection of employment) regulations indicate first signs of protectionism taking root in the U.K.," the President of NASSCOM, Kiran Karnik said and added that though there would be no big impact of regulations on Indian companies but it is a matter of concern.
Ref: Zeenews.com, April 11, 2006

NASSCOM signs pact with Dutch body to promote BPO exports

With a view to enabling small and medium businesses in Europe to outsource work to India, the National Association of Software and Services Companies (NASSCOM), the premier trade body and 'voice' of the IT software services in India, has tied up with the Dutch Centre for the Promotion of Imports (CPI) from developing countries. These two organizations will work closely to provide BPO expertise to European SMEs and help selected Indian IT companies to access European markets. As per the terms of agreement, NASSCOM will be responsible for the practical organization of the CPI program in India, and for selecting promising Indian suppliers to be trained and assisted by the CPI in exporting to Europe.
Ref: Zeenews.com, March 31, 2006

Google Earth threatens national security: Army chief

Expressing serious concerns over the easily available high-resolution images of strategic defence facilities on Google Earth, Chief of the Indian Army, General J.J. Singh recently said that it posed danger to national security and all countries will have to tackle this matter jointly. He further said that the images could give "an advantage" to parties that did not have their own defence satellites. Even strategic installations of other countries, including Pakistan and the U.S., are also available on the site.
Ref: CIOL.com, April 03, 2006

UP woos Intel, Microsoft

The Uttar Pradesh government, the government of the north Indian state of India, has invited Microsoft, the world’s largest software maker company, and Intel, a global chip manufacturing major, among other MNCs to set up facilities in the state. For this purpose, the government has promised to give 100-200 acres of land in the industrial corridor of the Lucknow Industrial Development Authority.  This was announced by Uttar Pradesh Development Council (UPDC) Chairman and ruling Samajwadi Party national general secretary Amar Singh while recently inaugurating ‘UP IT Expo Infocom 2006’ in Lucknow.
Ref: Tribune, April 02, 2006

Indo-U.S. trade body opens Bangalore office

With a view to understanding the Indian point of view and maximizing the business opportunity available in U.S. and India, the Washington DC-based United States Indian American Chamber of Commerce (USIACC) recently announced the launch of its India headquarters in Bangalore and is expected to open offices in Delhi, Mumbai and Chennai as well. USIACC, which works on accelerating trade and investment between India and the U.S., is going to have annual convention in Washington DC on October 11 and 12, 2006.
Ref: CIOL.com, April 05, 2006

Industry plans “bridge course” for fresh grads

To overcome the shortage of industry-ready engineering students, the premier trade body and 'voice' of the IT software services in India, National Association of Software and Services Companies (NASSCOM) in conjunction with a few IT firms is planning to introduce a ‘bridge course’ to train candidates. India produces around 400,000 engineering and technical graduates every year. IT companies find themselves in a spot when rival companies poach new employees who have finished their in-house training with the company. This course could be an effective counter to tackle rampant attrition among companies. Besides the bridge course, NASSCOM was also working with academic institutions to provide certification courses in specialized areas such as VLSI (Very Large System Integration) design and microelectronics.
Ref: CIOL.com, April 06, 2006

Telcos must get govt nod to rope in new investors

In the wake of Essar Group, the domestic partner in the Hutchison-Essar joint venture, writing to Department of Telecommunications (DoT), the government body that formulates policy matters for the telecom and broadcasting sector, Prime Minister’s Office and Finance Ministry, objecting to a 19.3% stake sale by its holding company Hutchison Telecom International to an Egyptian telecom firm Orascom, the DoT has finalized a proposal making it mandatory for any domestic telecom company to seek prior government approval for inducting a strategic partner in its foreign holding company. DoT has also suggested that the Foreign Investment Promotion Board (FIPB) must take note that such investment was not coming from unfriendly countries.
Ref: Financial Express, April 17, 2006

DoT takes call on foreign CEOs

In the wake of the recently hiked foreign direct investment (FDI) limit, the Department of Telecom (DoT) has proposed sweeping changes in the security norms for telecom companies. According to the fresh set of proposals drafted by the IT Ministry, security issues are not to be linked with FDI limits, and the same rules will apply to all telecom companies regardless of whether they have 49% or 74% FDI. Besides that, foreigners are not to be barred from taking up senior management positions such as CEO, CTO or CFO on telecom company boards.
The Indian Express, April 14, 2006

CDMA group seeks equal spectrum quota

The CDMA Development Group (CDG), a consortium of companies that have joined together to lead the adoption and evolution of CDMA wireless systems, have expressed concerns over the Union government’s policy of allocating less quantum of radio frequency to CDMA-based operators compared to what is being allocated to those operators using GSM technology. CDG said that continuing the current approach of unequal assignment of spectrum to service providers using different technologies under the same license conditions would significantly dilute and distort India's technology-neutral stance. Citing TRAI’s recommendation that quantum of additional spectrum assignments to GSM and CDMA operators should be equal, CDG said that unequal allocation of spectrum for different mobile technologies is unique to India and is not practised anywhere else in the world. In March, the Department of Telecom (DoT) had announced its policy for allocation of additional spectrum wherein it had allowed a maximum of 15 Mhz to GSM players and 7.5 Mhz to CDMA operators for the same number of subscribers.
Business Line, April 05, 2006

Tata punches holes in spectrum policy

Amidst various telecom operators’ tall claims of customer growth, Chief of Tata group, India’s largest private sector diversified business conglomerate, Ratan Tata has raised the issue of "self-proclaimed subscriber base" by every individual service provider. He also objected to Department of Telecom's order of allocating spectrum on such basis without an established mechanism for verification. On the Telecom Ministry's policy of linking spectrum allocation with subscriber base, Ratan Tata said in a communication, "The DoT order prescribes stand-alone subscriber base threshold levels and technology-based spectrum allocations, on a free basis. These do not appear to be part of a publicly defined spectrum policy." He has asked DoT to hear and consider views of all constituents, before finalizing the allocation of any additional spectrum.
Business Standard, April 26, 2006

Tata Tele, Infocomm offer mobility on fixed wireless

Following the Telecom Dispute Settlement and Appellate Tribunal (TDSAT) order in September 2005, which termed fixed wireless phones (FWP) services akin to that of wireless in local loop-mobile (WLL-M) services, Tata Teleservices, a telecoms service provider and a part of India's largest private sector business Tata group, and Reliance Infocomm, a flagship company of the Anil Dhirubhai Ambani Enterprises Group, have begun offering roaming on FWP and fixed wireless terminals in short distance chargeable area (SDCA). In some cases, the SDCA can cover an entire city. For instance, Mumbai is considered as a single SDCA. Tata Tele started offering mobility on FWP and FWT a couple of months ago, while Reliance Infocomm started it last month.
Business Standard, April 04, 2006

ISPs take Net telephony fee issue to TDSAT

Challenging the decision of the Department of Telecom (DoT) to impose licence fee on Internet telephony and arguing that this move will make the business, which was in its nascent stage, unviable; Internet service providers (ISPs) have filed an appeal with the Telecom Dispute Settlement Appellate Tribunal (TDSAT). Earlier DoT had asked the operators offering Internet telephony to cough up 6% of their annual revenues as licence fee. This was aimed at bringing the licence conditions for Internet telephony at par with domestic long distance licence norms. TDSAT admitted the appeal and has asked DoT to file its response.
Business Line, April 07, 2006

Telcos should not use interconnection for business advantage

Expressing concern over the declining quality of telecom services, Chairman of Telecom Regulatory Authority of India (TRAI), the independent regulator established by the Government of India to regulate the telecommunications business in India, Nripendra Misra recently solicited the cooperation of all service providers and also appealed to them not to view this as a purely commercial strategy. On the issue of spectrum, which is also a key constraint in improving the quality of service, he said availability of spectrum remains a major constraint and prompt vacation by defence and other security forces has to be ensured.
Zeenews.com, April 07, 2006

Allow use of special characters for value added services: TRAI

In a set of recommendations forwarded to the Department of Telecom, telecom regulator Telecom Regulatory Authority of India (TRAI) has asked the government to review national numbering plan 2003 to allow for the use of special characters like star (*) and hash (#) within the service providers network for value-added services. The NNP 2003 does not permit the use of any special characters for voice services. However, it does not encompass the procedure by which the subscriber can access the service provider's physical network. The recommendation was made after obtaining clarification from service providers who were using special characters or symbols.
Zeenews.com, April 12, 2006

TRAI gets notice on ADC petition

Acting on a petition filed by the state-owned telecom service provider, Bharat Sanchar Nigam Limited, challenging the Telecom Regulatory Authority of India’s order to reduce access deficit charge, The Telecom Dispute Settlement Appellate Tribunal (TDSAT) recently issued notice to TRAI. BSNL's view is that the amount collected under the new regime was inadequate to support 14 million fixed line telephone connections in the rural areas. TRAI had introduced the new ADC regime from March 1 onwards, which was responsible in bringing down the total kitty from $1.1 billion to just over $666 million. BSNL has sought it to be raised above $2.2 billion.
Business Line, April 18, 2006

MoF asks DoT take holistic view of revenue matters in future

In the wake of the Department of Telecom's decision last year to cut fee for national and international long distance licences to an uniform $550,000 from $22.22 million and $5.5 million respectively, the Finance Ministry has pulled up the IT Ministry for not calculating revenue loss due to cut in long distance licence fee. The Finance Ministry has asked it to take a "holistic" view on spectrum, licence and entry fees -- issues that could have an impact on government earnings. In its reply to a DoT communication, Finance Ministry has said that DoT should in future take a holistic view of the various changes such as licence fee, spectrum charges and should evolve a transparent and stable regime in consultation with this ministry.
Zeenews.com, April 26, 2006

Claiming that Indian Performing Rights Society (IPRS), which claims to protect the interests of lyricists and composers, has no authority to demand licence fees for songs broadcast by them, two FM broadcasters—Radio Today Broadcasting Limited (FM Radio Wing of India Today Group) and Radio Mirchi—have moved the Calcutta High Court. 
Exchange4media, April 18, 2006