'Telecom FDI cap to be raised'

Communications Minister Dayanidhi Maran today said the government was firm on raising the Foreign Direct Investment (FDI) cap in the telecom sector to 74 per cent from the present level of 49 per cent.

He also said that the government was not considering any proposal to merge the telecom public sector organisations, Bharat Sanchar Nigam Limited and Mahanagar Telephone Nigam Limited.

Speaking to reporters on the sidelines of a seminar on e-Governance in Municipalities, Maran said, "FDI is welcome in the Indian telecom sector as it will cater to the need to finance huge infrastructure facilities. We will listen to the views expressed by our partners and will come out with a final decision very soon."

In Budget 2004-05, Finance Minister P Chidambaram has said the government would raise the FDI cap in telecom along with civil aviation and insurance.

But the plan for telecom has run into opposition among the partners of the United Progressive Alliance government, who have said this would compromise the security interests of the country. Maran said he would not like to comment on the issue.

He also said that the government was not planning to merge BSNL and MTNL. "Merger of the two PSUs is not an issue in my Ministry," Maran said.

The previous government at the Centre had mooted the merger, to develop on the synergy between the two organisations.

Instead, Maran said, "BSNL and MTNL will start providing broadband services from December this year, across the country."

The two companies have already started rolling out infrastructure required to offer such services, he said.

Maran said he expected the broadband prices to fall with the entry of the PSUs into service arena.

"The two companies would be able to offer broadband services to a large number of customers in different parts of the country, that too at a competitive price," he said.

Earlier in his speech, the minister, who is also in charge of the information technology portfolio, said that he would assist other ministries, departments and the state governments to implement e-Governance projects in various sectors.

"My Ministry will act as a facilitator in the transformation process we are all talking about," he said. Maran said that the country should avail of the benefits from the domestic software industry.

"We must fully use the large oasis of IT skills existing in the country to come out with world class products," he said.