VSNL's WiMAX broadband services by Jan

NEW DELHI: Videsh Sanchar Nigam Ltd (VSNL), a Tata Group company, plans to launch wireless broadband service on the WiMAX platform by January. The company is also mulling a new brand identity, similar to that of Tata Indicom for its WiMAX services. VSNL presently provides broadband services on the Tata Indicom platform only.

“VSNL’s corporate identity would change to Tata Communications from next year, but for retail business we want to have a different brand name,” VSNL senior vice-president Srinivasa Addepalli told ET. He, however, said that there is a possibility that the company may initially ride on the back of Tata Indicom to launch its WiMAX broadband services.

“In the next 2-3 weeks, we will take a decision on the matter,” Mr Addepalli said.

WiMAX is a telecom technology that enables high data output. The technology would be very helpful in extending the broadband penetration across the country, especially in the rural areas. The government is already in the process of allocating 700 MHz spectrum for WiMAX users.

VSNL estimates an investment of about $500-600 million for rolling out WiMAX services in 35 cities across the country over the next three years. It would launch the service in Bangalore and then cover other major cities like Delhi, Mumbai and Hyderabad in the first phase. In the second phase, the company plans to reach to customers in about 35 cities across the country — mainly consisting of all the state capitals.

While the company is planning to have a full-fledged presence in 35 cities only, it has also started working towards spreading its wings to about 125 towns. In rest of the centres the services would be available only for corporate clients. VSNL plans to establish 1700 sale centres for its broadband operations. VSNL would be the first company to launch broadband services on the WiMAX platform for retail consumers in India.

Earlier the company was offering the service to only corporate consumers but the potential in the retail market has attracted the company towards launching it on a mass scale. The Tata Group company has tied up with Telsima of US to procure equipment for the WiMAX service. For spreading its services in the tier-II centres, the company will use Tata Teleservices towers.

It is also looking for short-term lease of BSNL towers in areas where Tata Tele towers may not be available. The company has put a target of 7-9 million subscribers or 25-30% of the total broadband market by 2012.

HOT STOCKS for 12-12-07

STATISTICS :

Nifty may open lower due to yesterdays selloff from US, can see Nifty opening @ 6040 and can recover a bit in the second session, Market will be volatile with nifty having support @ 6005, and resistance level@ 6095.

INTRADAY :

CAIRN : buy for a tgt of 222+, sl @ 206

IDEA : buy for a tgt of 138+, sl @ 128

FUTURES :

IDEA : buy for a tgt of 139+, sl @ 129*

CAIRN : buy for a tgt of 223+ , sl @ 207

WIPRO : sell for a tgt of 496, sl @ 510

SATYAM : sell for a tgt of 336, sl @ 447

RPL : buy below 224 for a tgt of 232+ , sl @ 220

OPTIONS :

Nifty : buy put 6000 for a tgt of 150+, sl @ 105

INFOSYS : buy call 1650 below 90 for a tgt of 125+ , sl @ 75

POWERGRID : buy call 150 below 7 for a tgt of 10+ , sl @ 5

Wall Street falls on Fed rate cut

FACED with growing warnings of recession, the US Federal Reserve cut interest rates last night by a quarter percentage point to 4.25 per cent.

The cut in the federal funds rate is the third in the past three months by the world's most powerful central bank. And Fed officials signalled that further cuts were possible if the downturn in housing and the crisis in mortgage lending were to get worse.

In addition to cutting the funds rate, chairman Ben Bernanke announced the Fed was reducing its discount rate, the interest it charges to make direct loans to banks, also by a quarter-point, to 4.75 per cent. This reduction was aimed at encouraging banks to borrow more freely from the Fed at a time when there are worries that a rising number of bad loans will prompt banks to tighten credit conditions too severely, adding another strain on the already fragile economy.

Commercial banks were expected to match the latest reduction by trimming their prime lending rate - which would reduce the rate for millions of consumer and business loans to 7.25 per cent.

Shares on Wall Street fell on the news as many had been urging a half-point cut, citing growing pressure in wholesale money markets and a loss of earnings momentum. But recent figures showed more jobs were created in November than had been expected.

Rates have come down from 5.25 per cent in September, and further cuts are expected.

The Fed's decision came as the chief of government-sponsored mortgage provider Freddie Mac said it will lose an additional $5.5 billion (2.7 billion) to $7.5 billion (£3.7 billion) over the next few years as the housing crisis worsens and home-loan defaults rise.

Cairn India to join Nifty from tomorrow

MUMBAI: Oil exploration firm Cairn India is set to join the National Stock Exchange's benchmark index Nifty from tomorrow.

The company, which got listed on the bourses early this year, has witnessed about 35 per cent rise in its share price in the past 11 months, while its market capitalisation has surged to Rs 37,542.02 crore (about 9.5 billion dollars).

It also ranks as the fourth largest oil and gas company in India. The scrip today closed at Rs 211.10, down 0.68 per cent, at the BSE.

Interestingly, its parent firm Cairn Energy Plc, which is listed on the London Stock Exchange, is expected to be included in the benchmark index FTSE-100 based on today's closing at the exchange.

However, Cairn Energy Plc, which has been listed on the UK bourse for the past nine years, has a market cap less than its Indian subsidiary's, with around seven billion dollars (3,896 million pounds). The shares were trading at 25.43 pounds, up 1.48 per cent, at the LSE.

Cairn India joining the NSE depicts the growth of the Indian stock markets and the company's market cap soaring past that of its parent firm is a good enough example, a market analyst said.

Cairn India is replacing HPCL from the 50-share wide- based Nifty index from tomorrow, while Idea Cellular would be included in the index in place of MTNL.

Reliance to explore oil, gas in Colombias

Mukesh Ambani-led Reliance Industries Ltd (RIL) has been awarded exploration contracts for two offshore hydrocarbon blocks in Colombia, the company said in a statement on Tuesday.

"RIL signed hydrocarbon production and exploitation contracts with Agencia Nacional de Hydrocarburos (ANH) of Colombia for two offshore blocks, Borojo North and Borojo South, on December 10 at Bogota, the capital of Colombia," the statement said.

These exploration blocks are located on the Pacific Ocean, west of Colombia in water depths reaching up to 1,500 metres, according to RIL's statement.

The signing of contracts follows inking of a technical evaluation agreement by the two sides in 2005.

The contract provides a six-year exploration period consisting of four phases of 18 months each, with a right to exit at the end of each phase, the statement noted.

"Over the six years, the company is expected to drill up to two wells in each block, besides conducting seismic, multi-beam and heat-flow surveys. That will require an investment of $50 million," RIL said.