We lost 2 yrs to attract funds in telecom: Sibal

'Next set of auctions by December-end'

Communications and information technology (IT) minister Kapil Sibal said on Friday India had lost two years, critical to attracting investments in the telecom sector, due to some incidents during the tenure of the previous government.

Sibal said when he took charge of the ministry, there were “legacy issues”. Then came the 2G scam, which forced the government to put everything in telecom on the backburner. According to a recent internal analysis by the Department of Economic Affairs, foreign investment in telecom dropped 81 per cent in 2012-12 compared to a year ago. Between April 2000 and March 2013, the sector attracted foreign direct investment (FDI) of Rs 58,732 crore, seven per cent of the country’s cumulative FDI during the period.

While telecom received Rs 12,270 crore of FDI during 2009-10 and Rs 9,012 crore in 2011-12, it plunged to Rs 1,654 crore in 2012-13, the analysis noted, citing data from the Department of Industrial Policy and Promotion.

Last month, Economic Affairs Secretary Arvind Mayaram wrote to M F Farooqui, secretary, department of telecommunications, expressing concern on the steep decline in foreign investments in telecom. Mayaram has requested Farooqui to examine how to address the issue.

“The next set of auctions will be by December-end, hopefully. What will be set for floor price on which telecom operators will bid will be, I think, relatively lower for them to make competitive bids,” the minister said in a video message on the occasion of re-branding of the Cellular Operators Association of India (COAI).

The matter will be decided by the telecom commission and the ministry will then send its views to the Empowered Group of Ministers (EGoM), which will forward its views to the cabinet for final decision, he added.

A separate Inter-Ministerial Committee, formed to oversee auction modalities, has tentatively set January 7-8 to start the auctions. Meanwhile, the telecom commission recently sought clarifications from the Telecom Regulatory Authority of India on its recommendations regarding the lower reserve price of spectrum the regulator had suggested recently.