Telecom Commission approves 100% FDI in telecom sector

Posted By: Religare
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Telecom Commission approves 100% FDI in telecom sector
The Telecom Commission on Tuesday gave its nod to raise Foreign Direct Investment (FDI) limit in telecom sector from 74 per cent to 100 per cent, subject to approval from the Cabinet, said a media report.

The development, if gets Cabinet's approval, will help foreign companies buy 100 per cent stake in their Indian subsidiaries or it would also do away with the need to search for a new Indian partner if the earlier one quits.

Companies in the telecom sector enjoy 49 per cent of FDI through automatic route. However, for FDI of over 49 per cent, companies will have to seek the approval of Foreign Investment Promotion Board (FIPB), the report said.

The move has come on the backdrop of deteriorating health of the telecom sector amidst rising finance costs and cut-throat competition, resulting into falling profits and margins. COAI expects the debt of telecom sector stood at Rs 1,85,720 crore at end of 2011-12.

Meanwhile, the telecom commission also considered the idea of formation of Telecom Finance Corporation (TFC) to address the sector's funding challenges and asked for a detailed report on it.

Read more about: telecom, fdi, telecom commission
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