The Telecom Commission, the apex decision-making body of the Department of Telecom, may consider the government’s plan to allow 100% FDI for telecom services through the automatic route. Currently, the government allows 100% FDI, of which 49% investment in a company can be done through the automatic route. Beyond 49% investment from overseas currently requires government approval because of security reasons.
If the Telecom Commission allows 100% FDI through the automatic route would attract foreign funds, PTI reported.
A source told the wire service that the Telecom Commission might consider raising of FDI limit up to 100% for all telecom services including infrastructure through automatic route.
In addition, the Commission is likely to discuss the relief package recommended by an inter-ministerial group (IMG) for the telecom sector which is reeling under debt of around Rs 4.5 lakh crore, the wire service said.
Following the recommendation by the IMG, the Telecom Commission had in September approved the extension of time period for the payment of spectrum bought in auctions by telcos for 16 years from the current ten years. In addition, it had approved the move to lower the interest rate charged over penalties imposed on service providers with slight modifications.
The Commission had previously sought views of the regulator on IMG’s proposal to relax spectrum cap as it will provide exit path to loss-making mobile service providers and ease consolidation in the sector. The Telecom Regulatory Authority of India, in November, recommended that the ceiling on spectrum held by mobile operators within a particular band should be removed.
The regulator had also suggested a 50% cap on the combined spectrum holding inefficient bands like 700 MHz, 800 MHz and 900 MHz.
The suggestions will now go to the telecom department (DoT) for approval. If accepted, these suggestions would provide a major relief for the soon-to-be-merged Idea Cellular and Vodafone, as they would have breached the spectrum caps in certain locations under the existing rules.