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India no more a preferred destination for telcos: GSMA

Last Updated: Sunday, December 16, 2012 - 19:54

New Delhi: India is no more a preferred investment destination for global telecom operators looking to expand to new markets as the regulatory environment here is uncertain, industry body GSM Association said Sunday.

"You do see foreign acquisitions and investments in mobile. It is changing and clearly it is not focused on India now, while it was very much focused on India in the past," GSMA Director General Anne Bouverot said.

She said despite global economic slowdown around five telecom operators and even some companies operating in India, are looking to invest and expand their business to new countries. India, however, will have to wait till investor faith in the country is restored, she added.

"There are some opportunities and operators are looking at them. Burma is a very clear example. It is attracting lots of interest. There are a number of players, some of them in India, who are willing to invest there," She said.

Explaining the reasons why India is no more a preferred destination, Bouverot said: "It is economic as well regulatory. But they both have happened at the same time. It is the time when overall operators are saying we need to be careful about our finances and at the same time regulations have become more onerous. It (regulations) has been more taxing on operators and also less predictable."

It may be recalled the recent the auction of spectrum had earned the government a revenue of Rs 9,407.64 crore only against minimum expectation of Rs 28,000 crore and no new operator participated in the bidding.

According to the latest data of the Department of Industrial Policy and Promotion (DIPP), FDI as a source of funding has shrunk to a trickle for the once lucrative telecom sector with foreign investment inflows plunging to USD 43 million in the April-September period of the current fiscal compared to USD 1.9 billion it attracted in April-September 2011.

Bouverot said the trend of investment by telecom operators across globe is holding on to existing geographies and invest there because there is huge investment to be made in the network.

Bouverot cited the example of UAE-based Etisalat's exit from India and said: "Etisalat, for example, moved away from India when it is not a money problem. They are very rich company coming from a very rich country. The decision was not because they were not able to pay the price of the licence... It was more based on what they perceive as the potential of investing in India today."

She said India will have to bring predictability in its regulations to restore faith among investors for investment in the sector.

"I think retroactive decisions are the worst things ... There can be wonderful plans but then five years later somebody says I am changing it and I am not only changing it for future but I am changing it for past... Then what is the value of plan that you put on table," she said.

If positive sentiment returns to investors then "I think India is a wonderful market with huge potential for further growth. As I say 26 percent penetration in India, there is huge scope for expansion of business here," she said.


First Published: Sunday, December 16, 2012 - 19:54
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