The Hindu : Business : Rs. 3,000 cr. FDI in telecom cleared

Online edition of India's National Newspaper
Friday, Jan 19, 2007
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Rs. 3,000 cr. FDI in telecom cleared

Special Correspondent

Mauritius company to build towers; Ericsson plans $500 m investment

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NEW DELHI: The Cabinet Committee on Economic Affairs (CCEA) on Thursday approved a foreign direct investment (FDI) proposal of up to Rs. 3,000 crore by a Mauritius-based company in the telecom services sector.

As a first step, Independent Mobile Infrastructure Mauritius Ltd (IMIML) plans to acquire 10,000 equity shares of Rs. 10 each from the two promoters of Independent Mobile Infrastructure Private Limited. It will then invest the balance through further issue of shares over a period of one to five years depending on the capital requirements of the company.

Of the two promoters of the Indian company, S. Venkateswarulu holds 99.99 per cent of the equity and Chandra Padmasri the balance. The Indian company was set up in June last year.

The approval is subject to licensing and security requirements of the Department of Telecom and subject to the condition that the company would divest 26 per cent of the equity in favour of the Indian public in five years.

The project envisages acquisition and leasing of (mobile) towers and other passive infrastructure of mobile companies and sub-leasing them. The company would also operate and maintain the towers and other passive infrastructure assets in accordance with the service level agreements and carry out the business of providing all related services.

To lease assets

The company would maximise asset utilisation by leasing capacity to multiple tenants and contracting with wireless operators to build new towers based on operator's business plans.

Meanwhile, the Swedish telecom equipment maker Ericsson announced investment plans of $100 million (nearly Rs. 450 crore) annually for the next five years. "The investment can go up depending on the growth in the sector,'' Ericsson India Managing Director Mats Granryd told newspersons here.

The company recently bagged a major portion of a mega tender by Bharat Sanchar Nigam Limited (BSNL) for mobile infrastructure but the U.S. headquartered Motorola has challenged the selection process before the Delhi High Court.

Ericsson Chief Executive Officer Carl-Henric Svanberg, who was here to attend the CII-CEOs forum, said "the delay [High Court stay] is not a positive development for BSNL. The faster the solution the better it is.''

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