The Foreign Investment Promotion Board today cleared the proposal of Vodafone Essar, the country’s second-largest GSM-based mobile operator, to hive off its towers and related infrastructure business into a separate arm called Ortus Infratel.
The agency, which is the nodal point for clearing foreign investment proposals, had deferred this proposal twice earlier.
The FIPB also cleared the company’s applications for national and international long distance (NLD & ILD) and internet service provider (ISP) licence. So far, Vodafone Essar did not have pan-India NLD and ILD licence and held an ISP licence only for Gujarat.
As per Vodafone's proposal, Ortus Infratel and Holdings will hold Vodafone Essar's 42 per cent stake in Indus Towers, a three-way JV between Bharti Airtel, Vodafone Essar and Idea Cellular which manages towers in 16 telecom circles.
Vodafone Essar had proposed that two Mauritius-based companies — Vodafone Tower Holdings and Essar Infratel — would acquire 100 per cent stake in Ortus and had sought the FIPB’s approval for the transaction.
Anil Ambani's RCom and Bharti Airtel have already hived off their tower businesses.
However the board rejected the proposals of Tata Teleservices and Bharti Telemdia, which had sought relief from the penalties to be imposed on them by the RBI for not taking clearance for foreign holdings.
