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Friday, Dec 22, 2006
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FDI in telecom: deadline extended for compliance

Special Correspondent

Cabinet meet discusses DoT note on FDI

NEW DELHI: The Union Cabinet on Thursday extended the deadline till March 31, 2007 for telecom operators to comply with the guidelines for an increased foreign direct investment limit (FDI), of 74 per cent. This followed representations from the U.S. Trade Representative (USTR) and other stake holders to alter norms relating to repair by remote access, appointment of foreigners in top positions in telecom companies and veto powers to Indian shareholders with 10 per cent equity in joint ventures.

``The Department of Telecom's (DoT) note on FDI in telecom was discussed at the meeting. It has been referred to a group of officers headed by the Cabinet Secretary to prepare revised guidelines with regard to remote access on PSTN (fixed line phones)," Finance Minister P. Chidambaram told newspersons. He declined to reveal whether other proposals by the DoT were approved.

``The Cabinet Secretary will rewrite the remote access guidelines in line with the discussion in the Cabinet,'' he said.

The DoT is pushing for appointment of foreigners in key positions in telecom companies subject to security clearance from the Home Ministry annually.

The DoT also wants to do away with the veto power enjoyed by Indian shareholders with 10 per cent equity in joint ventures, but Indian companies and other ministries did not support the proposal.

On remote access, it wants a device fitted into the networks and monitored by the intelligence agencies.

Rewriting of norms

The Government began rewriting the FDI norms after the U.S. and other sections expressed concern over, among other issues, a clause incorporated to address security concerns expressed by the Left parties.

They had objected to the ban on foreign equipment manufacturers to repair faults through remote access in order to preclude the possibility of spying or controlling the network from abroad.

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