)
The government hopes to finalise a merger and acquisition (M&A) policy for the telecom sector by September 15, a move likely to spur a few significant deals in the debt-laden sector.
The department of telecommunications (DoT), in a recent discussion, decided to finalise the draft policy by July 31.
Last February, DoT had announced broad guidelines for M&A. Those had okayed speedy approval of merger proposals if the market share of the combined entity was not more than 35 per cent. However, it would seek recommendations of the Telecom Regulatory Authority of India if the market share was between 35 per cent and 60 per cent.
On Tuesday, Communications and Information Technology Minister Kapil Sibal said the ministry was in favour of 100 per cent foreign direct investment (FDI) in telecom. The matter would be discussed with the Prime Minister and then forwarded to the Cabinet for approval, he added.
Permitting 100 per cent FDI is likely to bring at least Rs 5-6 lakh crore of investments, he added. “By improving connectivity through the highest quality of connectivity and competition, it would further empower the aam aadmi of the country in a meaningful manner,” Sibal said.
Sibal, however, believes foreign investment in telecom has no relation with security issues. Increasing the FDI limit from 74 per cent to 100 per cent would not make much difference in security issues.
Earlier this month, the telecom commission had approved the proposal to raise the FDI cap to 100 per cent from 74 per cent. While FDI up to 49 per cent can come via automatic route, companies would have to get the foreign investment promotion board nod for investments beyond that.
The department of telecommunications (DoT), in a recent discussion, decided to finalise the draft policy by July 31.
Last February, DoT had announced broad guidelines for M&A. Those had okayed speedy approval of merger proposals if the market share of the combined entity was not more than 35 per cent. However, it would seek recommendations of the Telecom Regulatory Authority of India if the market share was between 35 per cent and 60 per cent.
On Tuesday, Communications and Information Technology Minister Kapil Sibal said the ministry was in favour of 100 per cent foreign direct investment (FDI) in telecom. The matter would be discussed with the Prime Minister and then forwarded to the Cabinet for approval, he added.
Permitting 100 per cent FDI is likely to bring at least Rs 5-6 lakh crore of investments, he added. “By improving connectivity through the highest quality of connectivity and competition, it would further empower the aam aadmi of the country in a meaningful manner,” Sibal said.
Sibal, however, believes foreign investment in telecom has no relation with security issues. Increasing the FDI limit from 74 per cent to 100 per cent would not make much difference in security issues.
Earlier this month, the telecom commission had approved the proposal to raise the FDI cap to 100 per cent from 74 per cent. While FDI up to 49 per cent can come via automatic route, companies would have to get the foreign investment promotion board nod for investments beyond that.
