The Hindu Business Line : Jury still out on foreigners heading telecom operations

The opinions
Telecom operators argue foreigners with experience in 3G technology-based services can add tremendous value to business.
Opponents say security risk concerns have to be addressed; point to BSNL's success.

New Delhi , Oct. 11

While the domestic aviation industry has made its case for appointing foreigners at the helm of their businesses, the jury is still out as far as the telecom sector is concerned.

On the one hand, the telecom industry is unanimously canvassing for lifting the ban on foreigners heading telecom operations in India as provided in the Press Note 5; on the other hand, the Union Home Ministry is opposing the move on the grounds that such a step could be a security risk for the country.

Telecom operators argue that with the country set to embrace newer technologies such as 3G and Wi-Max, foreigners who have had experience in running third generation technology-based cellular and broadband services in other parts of the world can add tremendous value to the Indian business.

While there are only two notable instances at present where a foreigner is occupying a key position in a telecom company (Bharti and Tata Teleservices), operators say they would like to employ more experienced foreigners especially in the technology area.

Mr T.V. Ramachandran, Director-General, Cellular Operators Association of India, said, "Foreigners who have had experience in launching 3G services in Europe and other parts of the world, bring along with them a lot of learning which can be useful for us, especially since we are just on the verge of deploying such new technologies. Going forward, I am sure operators would like to employ more foreigners."

No ban

Operators also point out that there is no ban on Indians occupying key positions in foreign telecom companies. They point out that telecom majors such as Vodafone and Motorola have people of Indian origin at the top.

Those opposing the move, however, say that India is vulnerable to security risks and therefore no chances should be taken even if unpopular laws have to be enforced. They point out that unlike the aviation sector, communications is a far more sensitive area especially with the Government allowing 74 per cent FDI for telecom companies.

"Indians are as good as anyone else to run a business. Look at BSNL, which has taken on the competition from private operators successfully and it doesn't have a single foreigner in its employee base," said a Government official.

They also pointed out that the FDI cap on Indian telecom sector is on the higher side when compared with markets such as the US and therefore even if Indians were heading the organisations there, the management control rested with Americans.

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