Telecom FDI norms may vary on foreign share

In the ongoing review of FDI norms for telecom services, a consensus seems to be emerging to bring in two sets of conditionalities -- one for those companies which have up to 49 per cent foreign investment and another for those that have more, up to the 74 per cent prescribed limit.

Even as this is under discussion, Bharti Tele-Ventures group chairman Sunil Mittal has shot off a missive to Communications and IT Minister Dayanidhi Maran, saying that such a move would be 'discriminatory' and seriously erode foreign investors' confidence in the Indian telecom sector.

"Companies having strategic partners at less than 49 per cent should get the same treatment as those which have over 49 per cent," he said, adding that both Vodafone and Singtel were blue-chip telecom companies and investment from them in an Indian operating company could not be of any disadvantage.

FIPB officials said another set of rules may be considered under the review. This set of conditions, which could include provisions concerning remote access, would be universal and applicable for all operators, irrespective of the quantum of foreign investment.

The views of various ministries -- department of telecommunications, finance ministry, home ministry and the industry ministry -- have been sent to the PMO. Their response, sources said, contain their individual views on the issues raised in the past.

The key issues that are being considered under the review include the opposition of various MNC telecom giants like AT&T, British Telecom and MCI to the clause barring "remote access" to Indian network for overseas carriers.

Another key hurdle is the clause mandating that only resident Indians can man key management posts like CEO and CFO.

DoT, in its views to the PMO, had conveyed that it was now willing to relax the clause for resident Indians and allow foreigners in these positions subject to a background check by the home ministry.

Mittal too has supported the argument for relaxing this norm and pointed out that Arun Sarin is CEO of Vodafone and Sanjiv Ahuja heads Orange, the two largest mobile firms globally.

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