DoT seeks four months to implement FDI norms

The IT and communications ministry is understood to have sought time till February 2 for implementing guidelines that permit up to 74 per cent foreign direct investment in the telecom sector instead of the December 31 deadline set by the government.

According to highly-placed sources, Communications and IT Minister Dayanidhi Maran has sought four months' time to enable resolution of inter-ministerial differences and addressing issues concerning telecom operators, particularly the security aspect and different sets of rules for firms with FDI up to 49 per cent and those with FDI between 49-74 per cent.

Immediately after the Cabinet meeting last week, Finance Minister P Chidambaram had announced that an extension of three months till December 31 has been given to the department of telecom (DoT) to resolve the pending issues.

Sources said the issue could go to the empowered group of ministers on FDI headed by Defence Minister Pranab Mukherjee for early resolution of differences.

The original Press Note 5 that laid out the FDI guidelines for telecom sector was issued in November last year with four months time for companies to abide by the norms.

But having failed to ensure compliance, the government gave two subsequent extension of three months each. This is the fourth time that an extension has been granted, but whether it will be three months or four months, will be clear only after the notification is issued.

DoT has admitted that as many as 63 applications for Unified Access Service Licenses were being adversely affected because of the existing Press Note 5. Also, a number of applications for long distance services (NLD and ILD) are not coming forward due to this.