 "India entry to become tougher for foreign telcos")
Entry to Indian market is going to be tougher for foreign telecom companies. The Government has proposed to make security clearances mandatory for foreign telecom companies, irrespective of how much equity they hold.
At present, foreign telecom companies do not require security clearances for entering India with up to 49% equity holding, and they only require security vetting beyond 49% equity holding which is cleared by the Foreign Investment Promotion Board (FIPB). The security clearance is given by the Ministry of Home Affairs (MHA).
The Department of Telecommunications (DoT) members are scheduled to meet on Thursday to discuss the recommendations of the Committee of Secretaries on the issue.
The Committee has also said that key executives like chairman, managing director, chief finance officer would require securing vetting of these appointments even before a licence is issued from MHA. Currently these permissions can be taken after the telco gets a licence.
According to the recommendations, companies should get security clearance before the DoT issues licences and the security clearance would stay valid for the entire period of the licence. However, the Government will have the power to withdraw the security clearances in case of adverse situations and instances.
Further, the Committee said that these clearances would be valid for five years, and security vetting should be done for the key executives periodically every five years.
Making it tougher, the Committee has also recommended that companies should get security clearances from the MHA even for foreign personnel required to be deployed for installation, operation and maintenance of the licence holder's network.
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In July last year, the Government had said that executives of companies in strategic sectors, like telecom, who worked in Pakistan will not be permitted to work in India. The FIPB had then cleared a proposal by Norwegian telecom major Telenor to increase its stake in its Indian company Telewings Communications Services Pvt Ltd from 49% to 74% with the clause - officials who have worked in Pakistan "will not be allowed to work in India".
Not just Telenor, Singtel that has stake in Bharti Airtel also has a 30% equity in Warid that operates in India. Axiata which has stake in Idea Cellular has 89% stake in Multinet which runs an optic fibre cable network connecting major cities in Pakistan. Telenor SA has a 100% fully owned telecom services company in Pakistan.
Other foreign telecom companies which are operating in India include Russia's Sistema, and equipment vendors like Ericsson, NSN, Huawei, ZTE, Cisco, Juniper among others.