Theresa May’s top minister plotted to oust her: Book

Chancellor Angela Merkel was widely expected to win a fourth term in office as Germans went to the polls on Sunday in an election that is also likely to see the farthest right-wing party in 60 years, the anti-migrant Alternative for Germany, win seats in parliament. Merkel campaigned on her record as chancellor for 12 years, emphasising the country's record-low unemployment, strong economic growth, balanced budget and growing international importance. That's helped keep her conservative bloc well atop the polls ahead of today's election over the center-left Social Democrats of challenger Martin Schulz. Schulz voted together with his wife Inge in the city hall of his hometown of Wuerselen in western Germany. "I hope that as many people as possible will cast their vote today and strengthen the democratic future of Germany," Schulz told reporters.

Merkel's conservative Christian Democratic Party and its sister party, the Bavaria-only Christian Social Union, have governed the country for the last four years with the Social Democrats in a so-called "grand coalition." Most forecasts suggest that coalition will win another majority in today's election outcome, but several different coalition government combinations could be possible. Pollsters said earlier in the week that many of the 61.5 million who were eligible to vote had remained undecided until the very last moment.

That included Bernhard Sommerfeld, a 62 -year-old book seller, who cast his vote on Sunday morning in Berlin after the opening of the polling stations at 8 am (local time). US bombers flew off the east coast of North Korea in a show of strength carried out to demonstrate American military prowess amid escalated tensions between the two countries due to Pyongyang's weapons programs. "This mission is a demonstration of US resolve and a clear message that the President (Donald Trump) has many military options to defeat any threat," Chief Pentagon Spokesperson Dana W White said in a statement on Saturday.

The US Air Force B-1B Lancer bombers from Guam, along with the force's F-15C Eagle fighter escorts from Okinawa, Japan, flew in international airspace over the waters east of North Korea on Friday, she said, reports PTI.

The flight came after days of increasingly bellicose rhetoric between US President Donald Trump and North Korean leader Kim Jong-Un's regime, as international alarm mounts over Pyongyang's nuclear ambitions.

"This is the farthest north of the Demilitarised Zone (DMZ) any US fighter or bomber aircraft have flown off North Korea's coast in the 21st century, underscoring the seriousness with which we take DPRK's reckless behaviour," White said. She said that North Korea's weapons program is a grave threat to the Asia-Pacific region and the entire international community. British Prime Minister Theresa May faced a plot from her senior cabinet ministers to oust her in the immediate aftermath of the June general election that saw the Conservative party lose its overall majority in Parliament, a new book has claimed.

The four most senior figures in her Cabinet – Chancellor Philip Hammond, Foreign Secretary Boris Johnson, Brexit Secretary David Davis and Home Secretary Amber Rudd – plotted to remove her following an election seen as a failed gamble by the British Prime Minister, according to 'Fall Out, A Year Of Political Mayhem'.

Written by 'The Sunday Times' political editor Tim Shipman, with extracts published in the newspaper today, the book claims that Hammond texted Johnson in the early hours of the morning following the election on June 8 to say he would support him as the next leader.

It claims that a "triumvirate" plan was hatched under which Johnson would lead the UK as the new prime minister, Brexit Secretary Davis would handle the European Union withdrawal and Hammond would run the country's finances.

According to the latest political book, the plan failed once it became clear that May had not plans to step down and Davis indicated he could not work under Johnson. Meanwhile, moderates with the Tory party, including former prime ministers David Cameron and John Major, and leading figures like George Osborne and Ruth Davidson are said to have gathered behind Rudd, with the home secretary reported to have said she was keen to run. The revelations of the book came as the divisions within the top tier of the government are at their most pronounced.

Pro-Brexit Johnson has reportedly demanded a series of assurances over May’s recently proposed two-year transition period after Britain leaves the EU. The foreign minister wants Britain not to adopt any new EU rules and regulations after it formally leaves in March 2019, according to ‘The Sunday Telegraph’. The stance puts him on a collision course with the UK Treasury department headed by Hammond, who wants a "status quo" transition.

Johnson also wants Britain to be able to sign trade deals during the transition period and opposes paying billions of pounds for access to the EU single market after 2021. There are fears that Hammond is still pursuing a longer transition, with Johnson insisting two years is an absolute limit as announced by May in a key speech in Florence, Italy, last week.

National Pension System (NPS) – Part II

Last week we wrote about NPS – particularly with regard to the various withdrawal options that it offers. Severall readers wrote in and it slowly became apparent to us that though NPS per se has been introduced years ago, due to the various amendments made therein over time, investors are rather hazy about the updated latest features of the product. Hence, we propose to run a three part series on NPS detailing various aspects of the same such that at the end of the day, readers get reacquainted with what is essentially an excellent retirement investment product.

Opening NPS Account: Get an application form from any of the Point of Presence Service Providers (POP-SPs) consisting of public sector banks, post offices, some private banks, financial institutions and their branches. Copies of proof of identity and residence (passport, Aadhar card, ration card, voter ID, driving licence, utility bills, etc.) along with the application form need be submitted. Carry the original document for verification. You may also download the form from npscra.nsdl.co.in. The process is very easy if your mobile is linked to Aadhaar card. Just log on to enps. nsdl. com, key in your Aadhaar number and you will receive a one-time password (OTP) on your mobile. After validating it your details and photo will automatically get filled up in the online form. You may upload a scanned signature and a photograph if you do not want the Aadhaar picture.

If your mobile is not linked to your Aadhaar, send a request to the UIDAI to update your mobile details. The form can be downloaded at uidai.gov.in/images/application_form _11102012.pdf Print the form you have filled on-line, paste your photograph and sign it. This form should then be sent to the Central Recordkeeping Agency (CRA) at: Central Record Keeping Agency (eNPS), NSDL e-Governance Infrastructure Limited, 1st Floor, Times Tower, Kamala Mills Compound, Senapati Bapat Marg, Lower Parel, Mumbai - 400 013. CRA maintains all the NPS accounts, just like a depository maintains demat accounts for shares.

After you upload the form, you will be routed to a payment gateway for the initial contribution to your NPS account. The minimum amount is ` 500 per contribution with minimum of ` 6,000 per FY. You can pay by debit or credit card or Internet banking. You will receive a welcome kit from the PFRDA in a few days containing a Permanent Retirement Account Number (PRAN) card consisting of a 12-digit unique number. PRAN is portable. A subscriber can retain his PRAN throughout his life, even when he changes job or residence. You can have only one NPS account as is the case for PPF. Similarly, no joint account is possible.

Salient Features 1.Structure: The main mandatory account is the Tier-I account. Tier-II is an add-on having all the parameters identical with the Tier-I, but there is no tax deduction available and consequently, there is no restriction on any amount of withdrawals any time and any number of times, provided a minimum balance of ` 2,000 is maintained at the end of the FY. Any individual can opt for such add-on only after you have contributed at least the minimum contribution of ` 6,000 to Tier-I. This Tier-II is comparable with any MF scheme (other than ELSS) and can be likened to behave like a savings bank account, with much higher returns. It attracts the provisions of tax on capital gains. 2.At Maturity: When you attain the age of 60 years or super-annuation in accordance with the service rules, you have to use a minimum of 60% of the pension wealth to purchase a life annuity and withdraw the rest 40%. If closure is sought earlier than the age of 60 years, say, when the person opts for early VRS or resigns or desires to discontinue for any reason whatsoever after a minimum holding period of 10 years,, minimum 80% of the accumulated capital is to be used to buy the annuity.

The recent FA17, with a view to make the scheme more attractive, has provided further relief to an employee subscriber of NPS. Sec. 10 has been amended to provide for an additional exemption on partial withdrawal not exceeding 25% of the contribution made by an employee. For instance suppose your corpus at the end of its tenure is ` 2 lakh, consisting of your contribution of ` 1 lakh and a matching contribution of your employer. You can withdraw ` 25,000 which is 25% of your contribution during its tenure and ` 70,000 which is 40% of the balance ` 1,75,000 at the end of its term. The total works out at ` 95,000. On the other hand, if you do not withdraw any amount during its tenure, you will be allowed to withdraw only ` 80,000. All this is tax-free. With the rest of the amount you can buy an annuity which is taxable in your hands. 3.Annuity: You can opt for any of the annuities offered by any of the empanelled insurers — ICICI Prudential, LIC, Kotak Mahindra, Reliance Capital, SBI, HDFC, DSP Blackrock and UTI. LIC happens to be a default option. You can change the insurers at will, but only once a year.

Following are the generic annuities the subscriber to choose from:

1.For life at a uniform rate to the annuitant only.

2.For 5, 10, 15 or 20 years certain and thereafter as long as the annuitant is alive.

3.For life with return of purchase price on death of the annuitant.

4.For life increasing at a simple rate of 3% p.a.

5.For life with a provision of 50% of the annuity payable to spouse during his / her lifetime on death of the annuitant.

6.For life with a provision of 100% of the annuity payable to spouse during his / her lifetime on death of the annuitant.

7.For life with a provision of 100% of the annuity payable to spouse on death of the annuitant and with return of purchase price to the nominee on death of the spouse.

The last one is the default annuity. If the pension wealth is ` 2 lakh or less, you shall have the option to withdraw the entire pension wealth without purchasing an annuity. However, if it is more than ` 1 lakh but age is less than the minimum age required for purchasing any annuity you shall continue to subscribe to the NPS, until you attain the age of eligibility.

If you desire to defer the purchase of annuity, you can do so for a maximum three years from the date of attainment of age of superannuation. The intention to do so has to be declared in writing in the specified form at least 15 days before retirement. Moreover, if you do not desire to withdraw the balance amount, after purc$til the age of seventy years when it would get automatically credited to your bank account. During this period of deferment you can withdraw therefrom in maximum 10 annual installments or withdraw the entire amount at once.

The annuity and all the withdrawals will be paid through direct transfer to the subscriber’s bank account.

Next time we shall examine other aspects of NPS such as cost, the various investment options, nuances of tax treatment and finally whether it makes a good investment or not.

In the shoes of the Governor

Governors, prior to India becoming a Republic, were the agents of the Governor-General in Council, committed to sustain the Imperial power. They could dismiss Ministers and acted in the interests of the Raj. We hoped that after 1950, Governors would be committed to the Constitution instead of governments in New Delhi. Our constitutional scheme mandates Governors to owe allegiance to the Constitution. Recent experience shows that Governors have been errant in upholding constitutional values. They are, instead, committed to the partisan political interests of their benefactors.

Ideally, Governors are the eyes and ears of the Union. They inform the Union both in writing and otherwise of the governance in States over which they have jurisdiction. In the event, decisions are taken contrary to the letter and spirit of the Constitution, they are obligated to advise governments from time to time to act in accordance therewith. Yet, in the recent past, Governors are seen to represent the long arm of the Union, indulge in intrigue within the state and are catalysts in destabilising elected governments. We have witnessed situations where Governors help in manipulating legislators to install governments, through means fair or foul, as long as they can please their political masters.

This is not something new that has happened since 2014. Previous Governors also have ostensibly, though not as blatantly, acted in concert with the interests of their political appointees. The verdict in Bommai’s case encapsulated the brazen misuse of Article 356. The Supreme Court dealt with how in each state when exercising powers under Article 356, the then Union sought reports from Governors which were found to be wanting and thus held that imposition of President’s Rule in some states was illegal.

Over the years, recommendations of both the Sarkaria Commission and subsequently that of the Chief Justice MM Punchhi merely remained on paper. No political party is willing to give up attempts to destabilise opposition ruled states by us- ing the office of the Governor. That Governors have allowed themselves to be used in this fashion and thereby compromised the dignity of the high office they occupy, is a matter of concern. Both Justices Sarkaria and Punchhi have enunciated salutary guidelines to be followed by Governors for determining whether or not the incumbent government in the state has lost the confidence of the House. These guidelines have been discarded. Machinations of the Union, by using the office of the Governor, have been seen in full play for motives that are constitutionally suspect.

Both in Uttarakhand and Arunachal Pradesh, Governors acted with intent to destabilise elected governments. In Arunachal Pradesh, the Governor at the instance of a break-away group from the Congress led government, acting in tandem with the legislative members of the BJP, went to the extent of advancing the Assembly session, which was slated to meet in January 2016. This was done to facilitate the fall of an elected government. The Governor went to the extent of determining the manner in which proceedings in the House would be conducted by setting the agenda of the House with respect to the ‘No Confidence Motion’ moved against the Speaker. The Supreme Court commented adversely on the actions of the Governor as he had stepped outside the realms of his powers. The ensuing fiasco saw the imposition of President’s Rule in the state. If Governors start compromising democratic values, motivated by partisan politics, democracy will be under threat. Similarly, the Governor of Uttarakhand recommended imposition of President’s Rule, fearing “possible pandemonium during the floor test”. Governors, though advised not to get involved in the thicket of politics, have been proactive in destabilising elected governments. In Uttarakhand, the Governor acted on the unverified version of rebel MLAs of the Congress party along with the BJP and on a suo motu report to the Centre, acted unconstitutionally to satisfy the political aspirations of the BJP.

Most recently, in Nagaland, the Governor did not even wait for a Court verdict and hastily installed a new government, knowing that the matter was to be heard by the Division Bench of the High Court. Contrast this with what happened in Tamil Nadu. The Governor has chosen to procrastinate in requesting the Chief Minister to prove that he still enjoys the confidence of the House. The prevailing circumstances clearly point to the contrary. The Governor by his wanton inaction gave time to the Speaker of the House to disqualify 18 members of the Legislative Assembly belonging to the break-away group of the AIADMK to ensure sustenance of the present government, which in the absence of disqualification of 18 MLAs, would be in minority.

These events reflect the amoral nature of incumbent Governors, willing to subvert the Constitution, besmirching the reputation of the high office they hold.

Perhaps the time has come for Courts to intervene. Where it is found that a particular Governor has acted in a blatantly partisan manner, inconsistent with established constitutional principles and norms, his instant removal through court diktat will serve as a deterrent. The message will be clear. Unless their decisions reflect their commitment to the Constitution, their tenure will be in jeopardy.

The author is a Member of the Rajya Sabha, and a senior Indian National Congress leader. Views expressed are personal.

Will Kamal bloom for Kejri?

Delhi chief minister Arvind Kejriwal resurfaced after months of hibernation to call on superstar Kamal Haasan to declare their joint resolve to fight corruption and communalism. Clearly, the Aam Aadmi has acquired some filmi chakkar. Kejriwal is known to be allergic to kamal ka phool but is a different kamal set to bloom south of the Vindhyas? Kamal Haasan has played so many different roles, a neta may not be difficult. In MGR and Jayalalithaa’s land, movie actors generally deliver political super hits. Kejriwal may be hoping that Kamal Haasan doesn’t play Chachi 420 with him, and Kamal must be hoping that Kejriwal’s friendship is not just a photo-op but a case of ek duuje ke liye.

There seems to be a North-South divide between Kejriwal and Kamal Hasan, but then politics is full of odd couples. Remember even Mayawati and Mulayam Singh were once allies before elephant and cycle had such a head-on collision that mercifully there were no fatalities on either side. The oddest political couple is Subramanian Swamy and Sonia Gandhi. Today Swamy is hell bent on bringing down the House of Gandhi but was once spotted with Sonia Gandhi trying to bring down the house of Vajpayee. After that famous tea party Jayalalithaa, who was also Swamy’s guest, did pull down Vajpayee showing that in politics, opposites attract because of power in their stars. Another odd couple is PM Narendra Modi and Bihar CM Nitish Kumar whose relationship is secular one day and communal the next, leaving both singing kabhi khushi kabhi gham. There seem to be no made-for-each-other couples in politics: even the original jodi of BJP and Shiv Sena is troubled. Too much saffron seems to be spoiling the vegetarian biryani.

It’s not just Kejriwal, Kamal Haasan wants to bring Rajnikant into his star cast. If that happens, the event will be such a multi-starrer, it will have to be named Baahubali 3. At the moment, there are too many odds and evens in the Dravidian landscape. Jaya departed, Sasikala in jail, the TTV men in resorts, EPS-OPS increasingly sounding like alphabet soup, and DMK’s Stalin the senior-citizen dynast whose time, like Prince Charles, never comes. In this situation a Kamal-Rajini jodi could be more explosive than gunpowder. When it comes to shotgun marriages in politics, if miya and biwi are razi, the voter has no option but to play qazi.

Metro to chug into more of west Delhi soon

New Delhi: For lakhs of west Delhi residents, Blue Line — connecting Dwarka Sector 21 with Noida City Centre/Vaishali — is the only Metro link with the rest of the city. To take any other Metro line, they have to travel till Rajiv Chowk. However, this is going to change in six months with the opening of the Janakpuri West-Kalkaji section of the Magenta Line.

This line, along with the Pink Line that goes to Rajouri Garden, will put west Delhi firmly on the Metro map for the first time. Not only will the Majenta Line cover densely populated areas of west Delhi like Palam, Dabri, Mahavir Enclave, Sagarpur, Dashrath Puri, etc, it will also bring that part of the city closer to the domestic airport, south Delhi, Gurgaon and Faridabad. “

At present, west Delhi commuters have no option but to travel till Rajiv Chowk to change trains. When the Magenta Line opens by March 2018, they can directly go to Hauz Khas in south Delhi or take a train to Gurgaon,” said a senior Delhi Metro Rail Corporation (DMRC) official. “The commuters will save at least 25 minutes of travel time when the line opens,” he said.

“The entire Magenta Line will also act as a feeder for the presently operational Blue Line as both the originating sta- tions of this corridor – Janakpuri West and Botanical Garden – are important Vinod Nagar west Delhi residents. Commuters will be able to change trains at the Rajouri Garden Metro station to reach northwest Delhi, north Delhi and south Delhi areas such as Sarojini Nagar and INA — an interchange station for the Yellow Line (Samaypur Badli-HUDA City Centre).

“The Magenta Line will cover areas that are only connected by buses at present. We expect it to reduce congestion on the Palam flyover, which gets choked during peak hours. The corridor has the same alignment as the flyover,” the official said.

The line will also go to the domestic Terminal 1 of the Delhi airport that, at present, can’t be accessed by Metro directly and commuters have to take a shuttle service from the Airport Express Line.

The Metro official also said that constructing an underground Metro corridor under congested parts of west Delhi was a challenge for DMRC. “We had to be extra cautious as we were tunnelling below densely populated areas and most dwellings in these areas don’t have very strong foundations,” he said. “The tunnel is also close to the foundations of the Palam flyover and Metro’s Line 3,” he added.

Safeguarding India’s heritage

New Delhi: When the NDA government came to power in 2014, culture was expected to be a contentious issue. Critics voiced their concerns that the government would lend their “saffron credentials” to all things culture. Such concerns seem to have some basis, as some irresponsible statements by the man at the helm, Minister of State (independent charge) of Culture Mahesh Sharma, has managed to obfuscate the efforts of the government in the field.

Outlandish statements

From making statements, later denied, that “night outs for Indian girls is not part of our culture” to launching a countrywide movement to rid India of “cultural pollution,” Sharma managed to create a negative impression of the culture ministry and for a time seemed to confirm the critics’ worst fears.

In fact, the man — who also had charge of the tourism ministry till recently — was seen as being more resourceful and dynamic in his other ministry where he had launched a slew of initiatives.

This included the launch of the eticketing service in monuments which helped increase tourist footfalls in the country, and the declaring of 25 of the most prominent monuments as ‘adarsh’ or ‘model’ monuments. This initiative, in particular, was welcomed by all stakeholders in the sector.

Initiatives introduced

In the culture ministry, Sharma and his team have announced a number of initiatives, some of which are still to see the light of day. One of the most prominent announcements in 2015 was the redevelopment of the National School of Drama (NSD) greenlighting a new campus in the next three to four years for a budget of Rs 180 crore.

Then, the ministry also launched the culture-mapping scheme under which artistes were to be “graded” in order to equally distribute central funds across all regions. Under the scheme, artistes from the field of architecture, sculpture, painting, handicrafts, puppetry, music, dance, theatre, and literature will be graded by the Centre on the basis of their performance.

The categories devised are O “Outstanding” P “Promising” and W “Waiting.” The grading which was and is done by a selected committee, that comprises bureaucrats and artistes, will determine the amount of funds an artiste will receive and whether he or she can participate in festivals. According to a government memorandum, only those in P and O categories will be eligible to participate in festivals abroad.

However, outrage has emerged about the “discriminative” nature of this project and in private officials said that grading the lakhs of artistes who applied — the number was estimated to be at 1 crore — was proving to be a difficult exercise.

Despite the criticism and the practi-

cal problems some of the younger artistes selected have lauded the system.

Declassification of Netaji Files

Come 2016, the ministry had a series of hits and misses. Taking forward his promise of declassifying the Netaji

Files, Prime Minister Modi released the first lot of 100 files after they were conserved and digitised on January 23, 2016 on the date of Netaji’s 119th birth anniversary. The second and third batch of 50 and 25 files were then released by Sharma on March 29 and April 29, 2016. A fourth batch, too, was released on May 27. In all, 16,530 pages relating to Netaji Subhash Chandra Bose were released.

Other notable achievements also came up during this year. In 2016, the excavated remains of the Nalanda Mahavihara and Sikkim’s Khangchendzonga National Park and Chandigarh’s Capitol Complex made it to the list of UNESCO’s World Heritage Sites, while yoga was recognised as an element in the UNESCO’s list of Intangible Cultural Heritage.

Amendment to Monuments Bill

On the policy front, the ministry has also introduced the Ancient Monuments and Archaeological Sites Remains (Amendment) Bill, 2017. If passed by Parliament, the Bill could ensure that public works can take place through the “prohibited area” which is 100 meters of a protected monument — a practice which is currently forbidden under the law.

Recovering documents and cultural artefacts

On the issue of documentation and recovering cultural artefacts from abroad the government has made some strides forward. During the PM’s visit to the United States, US Attorney General Loretta Lynch pledged over 200 artefacts worth $100 million to India. They included religious sculptures and statues, bronzes and terracotta artefacts which were stolen from India and smuggled in the international art market. However, since then, the ministry has managed to bring back only 17 pieces.

On a positive note, the government signed an MoU with the Torre do Tombo (National Archives of Portugal) and they have handed over digital copies of 12,000 documents under 62 volumes to the National Archives of India. They consist of correspondence between Lisbon and Goa between 1568 to 1914.

Controversy over ongoing statue project in Gujarat

Despite such initiatives, concerns that the culture ministry is looking to “saffronise” Indian culture have not faded. Following PM Modi’s announcement, the ministry’s release of over Rs 200 crore for the ‘Statue of Unity’, a monument dedicated to freedom fighter Sardar Vallabhbhai Patel which was slated to come up in Gujarat, has caused concern.

Comments abounded on social media stating that the project, estimated around Rs 3,000 crore, was money being wasted on a project that could have been earmarked for better purposes. The government has dismissed such concerns, stating that already there were a plethora of Indira Gandhi statues in the country, and the balance needed to be rectified. Clearly, the fight over the “politics of culture” is far from over.

IUC Cut Puts Telcos in VoLTE Phase

Kalyan Parbat & Devina Sengupta

Kolkata | Mumbai: The 57% cut in interconnect usage charge and decision to scrap it altogether from January 2020 is likely to drive incumbent telecom operators such as Bharti Airtel, Vodafone India and Idea Cellular to rapidly launch and expand calling over VoLTE technology, and unveil more bundled offers to protect their turf, said analysts and industry experts.

This could trigger a faster shift to data services from voice, which accounts for about 80% of revenue at present, they said. The Telecom Regulatory Authority of India last week slashed IUC to 6 paise per minute, with effect from October 1. IUC is paid by a mobile carrier where a call originates to the mobile network where it terminates.

In recent reports, Bank of America-Merrill Lynch and CLSA said that any move towards zero IUC, or a bill-and-keep model, would automatically compel incumbents to upgrade networks to voice over LTE or VoLTE, a technology which is currently offered pan-India only by new entrant Reliance Jio Infocomm, and migrate their traffic to cut costs.

The incumbent operators, of whom Bharti Airtel recently announced its commercial VoLTE services launch in Mumbai, have op- posed the cut in IUC. The other two are in a testing phase of VoLTE.

A senior executive of one of the top three incumbent telecom operators said that the steep cut in interconnect charges would “unfairly” force incumbents to switch to VoLTE networks even at a time when 90% of voice traffic in India still terminates on 2G, 3G and non-VoLTE 4G networks. “The customer must be free to choose his preferred technology and it’s not for us to compel him to make a choice of one over another. With Trai throwing its weight behind one technology (VoLTE), there is clearly a travesty of justice, and the regulator’s commitment of being technology neutral is broken,” said the executive, who did not wish to be named.

In a recent interview to ET, former Trai chairman Rahul Khullar backed this view, saying the regulator’s IUC regulation forces telcos to migrate to VoLTE, which requires fully dedicated IP-networks, ironically at a time when next-generation networks in India remain a distant thought.

Older operators currently offer voice services on the legacy circuit-switch technology, with data being offered on a 4G net- work and voice on a 3G or 2G network. VoLTE technology allows an operator to offer both voice and data on the same network, with voice being just another application that rides on an LTE data network, resulting in more efficient use of airwaves. Goldman Sachs warned that the latest IUC regulation underscores “the regulatory risks in the Indian telecom sector”, which could prompt “investors to question” whether further regulatory changes in the industry could hurt incumbent carriers.

Kotak Institutional Equities said that such regulatory decisions “chip away at any incumbency advantage”. “Managing the regulatory side of the equation on grey areas like IUC is critical and incumbents have not done a good job here,” it said in a note seen by ET.

The top three incumbent telcos — Bharti Airtel, Vodafone and Idea Cellular — will be the biggest revenue losers once IUC is cut and then scrapped since they have the most number of subscribers and they garner a majority share of the IUC as most calls ter- minate on their networks.

In the immediate term, brokerage PhillipCapital said, the IUC cut and the sharp growth in data uptake will prompt incumbents to unveil more bundled offers to protect average revenue per user or ARPU, although the near-term impact will be negative as profitability of such offers could be lower.

Analysts at Swiss brokerage UBS said the shift towards zero IUC would accelerate the move of the Indian mobile market to bundled plans.

Big operators, it said, would “now be disincentivised to support low ARPU customers”, who primarily receive incoming calls, and may move them to “minimum threshold ARPU plans”. According to IBS, markets such as the United States, Hong Kong and Singapore, which have embraced zero IUC, are primarily post-paid markets where “customers have to sign up for bundled packages”.

PhillipCapital, however, said it expects bundling and benefits of ARPU protection to provide some respite from the envisaged sharp drops in operating income (Ebitda) following the reduction in interconnect rates. Goldman Sachs said while the IUC cut will hurt the top three telcos in the near term, the medium-to-long term impact is likely to be less pronounced as the traffic flow between incumbent telcos and Jio is expected to “become symmetrical over time”.

Older operators offer voice services on circuit-switch tech, with data offered on a 4G network and voice on a 3G, 2G network