100% FDI in telecom sector gets govt nod

The government on Wednesday notified its decision to permit 100 per cent foreign direct investment (FDI) under automatic route in the telecom services sector.

In a press note, the Department for Promotion of Industry and Internal Trade (DPIIT) said foreign investment in telecom services will be subject to the condition of Press Note 3 of 2020.

Accordingly, cases requiring prior government approval under the provisions of Press Note 3 will continue to be in place.

The DPIIT notifies its decisions through such press notes.

As per the Press Note 3, an entity of a country, which shares a land border with India or where the beneficial owner of investment into India is situated in or is a citizen of any such country, can invest only under the government route.

According to the DPIIT's press note, 100 per cent FDI is permitted in areas, including Telecom Infrastructure Providers Category-I, - Basic, Cellular, United Access Services, Unified license (Access services), Unified License, National/International Long Distance, Public Mobile Radio Trunked Services (PMRTS), and Global Mobile Personal Communications Services.

Other services include mobile number portability services, infrastructure provider category-I, providing dark fibre, right of way, duct space, and tower.

On September 15, the cabinet approved a big-bang relief package for the stressed telecom sector that includes a four-year break for companies from paying statutory dues, permission to share scarce airwaves, change in the definition of revenue on which levies are paid and 100 per cent foreign investment through the automatic route.

So far, up to 49 per cent was allowed through the automatic route and anything thereafter had to necessarily go through the government route.

The latest measures are expected to ease the cash flow issues being faced by some players in the industry.

Telecom industry body Cellular Operators Association of India (COAI) said the FDI approval will help the industry to build a robust telecom sector for new India.

"Through the amendment in License agreements, telecom service providers will be eased off the huge burdens of Bank Guarantees and will enable the availability of more funding for the expansion of the Telecom Network and build a Digitally Connected India.

“Further, SACFA clearance based self-declaration will facilitate ease of doing business & will help in the faster rollout of services to the citizens," COAI director general SP Kochhar said.

The DoT has also eased rules for clearing mobile tower installations in the country.

Now, the clearance of mobile tower installation will be done through self-declaration and in an automated time-bound manner through the Saral Sanchar portal.

"System will clear cases automatically and applicants can download the system generated SACFA clearance from SaralSanchar Portal of DoT.

"Cases not meeting auto-settled criteria ...will be processed by members through their integrated systems and will be cleared /rejected within 30 days," an official memorandum said.

Photograph: Mohamed Azakir/Reuters