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Finance ministry proposes the new foreign direct investment guidelines for the telecom sector

News , April 15, 2006

The finance ministry has proposed that the new foreign direct investment (FDI) guidelines in the telecom sector, which relate to security issues, should not be applicable to operators who have FDI below 49 per cent. Some telecom companies, including Tata Teleservices Limited (TTSL), British Telecom and AT&T have opposed the new conditions whereby all operators with foreign equity are required to have Indians as chief executive officer (CEO) and chief technology officer (CTO), and are also required to have access of remote networks in India. TTSL, which has foreigners as its CEO and CTO, has foreign equity much below 49 per cent and has no immediate plans to raise the FDI. On the other hand, British Telecom and AT&T want to provide international long distance (ILD) services in India but the remote access of networks condition is a major deterrent. They have, therefore, not applied for a licence yet.

 
 

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