New Delhi, Sept. 25: The captains of the telecom sector today lauded the N. K. Singh committee’s recommendation that foreign direct investment in the telecom sector should be raised from 49 per cent to 74 per cent.
“This is a good move and we hope the government will respond positively to these recommendations. Raising the FDI limit will give a fillip to the telecom revolution,” Bharti group chairman and managing director Sunil Bharti Mittal said.
“It is a step in the right direction. This will enormously help the telecom sector growth,” Essar Telecom CEO Vikash Saraf said.
The telecom sector has been pressing for a hike in the FDI limit several years. The FDI ceiling in various sub-sectors of telecom currently varies from 49 per cent to 100 per cent. There is no FDI cap in telecom equipment manufacturing, telecom services like internet (without gateways), infrastructure providers (IP-I), email, voice mail and IT enabled services.
However, an FDI cap of 74 per cent is applicable in case of internet (with gateways), infrastructure providers (IP-II) providing end-to-end bandwidth and radio paging services.
There is a 49 per cent FDI cap in the case of fixed line, cellular mobile, very small aperture terminals (V-sat), national long distance, international long distance and global mobile personal communications services. The FDI cap in the telecom sector is reviewed by the government depending upon investment needs and security considerations.
“The move will usher in more foreign investment in the sector and help improve growth in future,” HFCL chief Mahendra Nahata said.