Intra-circle investment norms to stay: Maran

This can impact STT's and Telekom Malaysia's bid to raise their stake in Idea.

The government did not propose to amend the norms that prohibited a company from holding a stake of over 10 per cent in two cellular service providers in the same circle, said Dayanidhi Maran, communications and information technology minister, today. This can impact STT's and Telekom Malaysia's bid to raise their stake in Idea Cellular.

"At the moment, we do not see any need to amend these guidelines. They must stay in place to prevent monopoly and cartelisation. All players must remain within the rules," Maran told Business Standard in an interview.

The government's stand is a blow to the STT-Telekom Malaysia consortium, which has sought approval for acquiring a 47.7 per cent stake in Idea Cellular.

SingTel, which like STT is owned by the Singapore government, has a 31 per cent stake in Bharti Tele-Ventures. As both Idea and Bharti provide services in eight common circles, the department of telecom has objected to the STT-Telekom Malaysia proposal.

The decision is also likely to put brakes on the Hutch-Essar joint bid to acquire up to 49 per cent stake in BPL's mobile business. Both Hutch and BPL offer services in Mumbai.

Maran said the government would soon issue guidelines for raising the foreign investment cap in telecom from 49 per cent to 74 per cent.

The minister also said he would move a Bill to amend the Telegraph Act during the monsoon session of Parliament. The Bill would make private cellular operators eligible for a share of the universal service obligation fund, he said.