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GoM on telecom approves hiking foreign investment cap to 74%
New Delhi, Sept 25: The group of ministers on telecom today approved hike in foreign investment limit in the sector to 74 per cent from the present 49 per cent, subject to the management control remaining in Indian hands.
New Delhi, Sept 25: The group of ministers on telecom today approved hike in foreign investment limit in the sector to 74 per cent from the present 49 per cent, subject to the management control remaining in Indian hands.
"The FDI limit will be 49 per cent but FII investment will not be a part of this limit. So the total foreign investment cap will be 74 per cent," Communications and IT Minister Arun Shourie told reporters after the first meeting of the group, chaired by Finance Minister Jaswant Singh.
In another major decision, the group also allowed intra-circle mergers in the sector but with a condition that number of service providers will not fall below three in any circle and that rural telephony obligations will get transferred to the new owner. Another condition for the merger would be that the new owner would get spectrum only as per the user base.
On achieving rural telephony targets, the group has decided to take a view on whether the current ceiling of five per cent of revenue share going towards universal service obligation fund be increased.
"The officers of the ministry of finance and Department of Telecom (dot) will work out a joint note in this regard and also to operationalise the USO fund. Besides this, the note will highlight the need to extend the concessions to state-owned BSNL for rural telephony for the entire 10th five year plan," Shourie said. All the recommendations of the GoM including that on FDI would be taken to the Cabinet for approval.
Bureau Report
In another major decision, the group also allowed intra-circle mergers in the sector but with a condition that number of service providers will not fall below three in any circle and that rural telephony obligations will get transferred to the new owner. Another condition for the merger would be that the new owner would get spectrum only as per the user base.
On achieving rural telephony targets, the group has decided to take a view on whether the current ceiling of five per cent of revenue share going towards universal service obligation fund be increased.
"The officers of the ministry of finance and Department of Telecom (dot) will work out a joint note in this regard and also to operationalise the USO fund. Besides this, the note will highlight the need to extend the concessions to state-owned BSNL for rural telephony for the entire 10th five year plan," Shourie said. All the recommendations of the GoM including that on FDI would be taken to the Cabinet for approval.
Bureau Report