Telecom FDI delay exposes differences

New Delhi: Lack of consensus within the Government as well as with the industry has left the framing of guidelines in midpoint. As a result the deadline for adhering to FDI norms in telecom has been extended for the second time.

The Department of Telecom (DoT) has sought three months time from the Prime Minister's Office to bring out the revised guidelines.

It has been eight months since the hike in FDI in telecom was notified and there is still no consensus on what the guidelines should be.

That is because there is still no agreement on three key issues.

FDI norms - just can't take a call

Foreign citizens holding key management positions

Norms linked to level of FDI

Remote access to Indian networks

Can foreign citizens hold key management positions in Indian Telecom companies? The CEO of Tata Tele is a foreign citizen and his company was one of the first to object to these norms.

Secondly, should there be different set of norms for companies with 49 per cent FDI which are majority Indian owned and for companies with FDI greater than 49 per cent?

Finally, should Indian networks be allowed to be remotely accessed from Abroad?

Companies like AT&T, Cable and Wireless and BT have been lobbying hard for remote access. But both industry and Government are divided on the issue of differential norms.

The investment commission headed by Ratan Tata was the first to suggest that companies that don't seek to hike their FDI should not be made to adhere to stiff norms.

This opinion was backed by the commerce ministry and is believed to have found favour with security agencies as well.

But the Department of Telecom feels that there should be uniformity in norms irrespective of the level of FDI.

Sunil Mittal was the first to oppose differential norms for FDI in telecom.

It seems improbable that in three months time DoT will find a solution that is acceptable to all.

Not because FDI guidelines are rocket science but because it is a fractious industry - an industry that is known to squabble on every sensitive issue.

And like spectrum allocation, FDI norms have exposed the divisions within.

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