The Hindu Business Line : DoT seeks Cabinet nod to amend Press Note 5

The Department of Telecom has moved a Cabinet note seeking to change some of the controversial provisions of the Press Note 5, which relates to hiking Foreign Direct Investment cap in the telecom sector from 49 per cent to 74 per cent.

As per the note, DoT has sought to remove the ban on foreigners from holding key posts in telecom companies. This will benefit companies such as Tata Teleservices who has a foreigner as its Chief Executive Officer. Bharti Airtel also has a foreigner as its Chief Technical Officer.

remote access

DoT has also proposed to allow operators to remote access their network. The existing norms in Press Note 5 bars operators from remote access making it necessary for them to build a network operating centre within the country. Remote access will allow operators to monitor their network in India from their existing monitoring centres located in other countries. This is beneficial for foreign companies making a foray in the Indian telecom sector as they will not have to invest in setting up a new network-monitoring centre in the country.

These two norms have been highly debated with the industry, on one hand, seeking the proposed relaxation and on the other hand, security agencies blocking any changes in the Press Note 5. Security agencies had said that allowing foreigners to hold key post in a telecom company and allowing remote access could pose a threat to national security.

Deadlock

The discussion had reached such an impasse that DoT even threatened to completely withdraw the decision to hike FDI cap to 74 per cent. DoT has not agreed to the suggestion to have a dual policy for operators having less than 49 per cent FDI and for those companies with up to 74 per cent FDI. The deadlock has delayed the implementation of the Press Note 5 with the Government moving back the deadline four times. Press Note 5 was issued in November 2005 and is to be implemented by January as per the last decision of the Union Cabinet.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Japan keen to take part in rail freight corridor project

Japan's ageing population and India's opportunity

Bharti teams up with AXA for life insurance foray

DoT seeks Cabinet nod to amend Press Note 5

Private equity investments soar: PwC

Bad scheduling of fertiliser imports costs PSUs Rs 160 cr in demurrage

RIL to invest $5.2 b for doubling KG basin output

Apt time to lift ban on sugar exports: Pawar

Century Mills set to down shutters in Mumbai

Sensex up 186 on back of strong fund buying

Momentum indicators signal a medium-term downtrend

ICICI Bank hikes lending, deposit rates