Bharti chief for easing of FDI norms in telecom

Bharti Group chairman Sunil Mittal yesterday asked the government to relax foreign direct investment norms to allow the telecom industry to raise capital for its needs.

Addressing the International Cellular Summit, organised by the Cellular Operators Association of India, he said: "The telecom sector needs investment. Foreign direct investment (FDI) or a combination of FDI and foreign institutional investment will cater to the investment needs of this sector. The government should relax FDI norms in order to get more foreign investment into the sector."

At present, maximum 49 percent FDI is allowed in the telecom sector. The telecom service providers are demanding a raise in the FDI cap to 74 per cent.

Mittal also said external commercial borrowing norms had been liberalised and there was a need to access foreign debt in the market.

Mittal sought BSNL's cooperation with the private operators in the area of interconnection. "BSNL must provide interconnection facility to the private operators whenever they enter into any circle and it may charge for the same," he said.

He , however, felt that BSNL should provide interconnection free to the private operators.

Mittal requested the government to reduce the high duties on the sector. " About 8 to 15 per cent of the revenues goes for the license fee. There is 8 per cent service tax. Again, there is excise duty, customs duty and cess levied on the base towers and other equipment. These duties must be brought down to ensure growth of the cellular sector," he said.

Mittal said that telecom bound the nation and increase in tele-density contributed to gross domestic product significantly. Growth of this sector must be seen as a national cause, he said.

Mittal speak

• FDI or combination of FDI and foreign institutional investment will cater to the investment needs of the telecom sector
• There is a need to access foreign debt markets
• BSNL must co-operate with private operators in the area of interconnectivity