04:56 am - Thursday 27 April 2017

Telecom Commission likely to discuss 100 percent FDI in telecom sector today

By insightVAS - Tue Jul 02, 1:12 pm

In a meeting scheduled today, Telecom Commission (TC) may discuss the proposal of hiking the Foreign Direct Investment limit from 74 percent to 100 percent in the telecom industry. The idea behind increasing FDI limit in telecom sector is to held industry players get fresh funds to lower their financial burden.

“It (FDI in telecom) will be discussed in the TC (Telecom Commission) meeting tomorrow,” a senior government official said.

According to sources, DoT is of the view that when the current limit of foreign direct investment (FDI) in telecom sector was raised from 49 percent to 74 percent, security agencies and the Home Ministry had raised various security related issues. DoT, therefore, is of the opinion that views of the two ministries be sought on the issue before taking a decision on the recommendations of a high-level committee on financing infrastructure (HLCFI) which has proposed raising the FDI cap to 100 percent in the telecom sector.

According to recent presentation by GSM industry body COAI to DoT, the debt of telecom sector stood at Rs 1,85,720 crore at end of 2011-12. This included debt of Rs 93,594 crore from domestic sources and Rs 92,126 crore from external sources.

The Commission is proposed to look at creation of Telecom Finance Corporation (TFC) to address the sector’s funding challenges.

The TFC is proposed to be set up on the lines of sectoral finance bodies such as Power Finance Corporation and Tourism Finance Corporation of India. The TFC is proposed to target financing Rs 38,000 crore in five-year period. The Commission may also examine if the government can divest or lower stake in Telecommunications Consultants India Ltd (TCIL), review the status of National Optical Fibre Network (NOFN) and progress made in different Telecom Development Parameters.

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