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Ambarish Mukherjee

`The DoT wants to examine the plan in detail as the company has sought a sort of blanket permission to enter every possible area of the telecom sector and its proposed activities would involve extremely complicated operations that need to be understood'.

New Delhi , May 22

AT&T's plan to enter the telecom sector through the joint venture route has hit a roadblock with the Foreign Investment Promotion Board (FIPB) deferring a decision on the company's application to invest in its Indian joint venture with the Mahindras.

The joint venture company planned to undertake multiple service provider operations in the telecom sector.

The decision to defer permission to AT&T followed requests from the Department of Telecom (DoT) that since the company proposed to undertake a very wide range of activities, the DoT needed more time to examine the details.

The examination is necessary as the company has sought a sort of blanket permission to enter every possible area of the telecom sector and its proposed activities would involve extremely complicated operations that need to be understood, sources said.

Last month, the US-based AT&T's Indian subsidiary AT&T Global Network Services India Private Ltd had sought Government permission to enter the Indian telecom sector with 74 per cent equity participation from its parent company AT&T Inc. The remaining 26 per cent would be held by Mahindra Air Services Ltd.

The company had applied to the FIPB for investing in the telecom sector to undertake the business of Internet Service Providers (ISP), international long distance calling and national long distance calling.

The company, in its application has stated that it also wished to engage in all such services and products that a holder of ILD licence, NLD licence and ISP licence is permitted to provide. The company would also engage in operating, maintaining and providing fast secure and reliable communications system network to service the needs of users in any geographical location including remote and distance locations, the application said.

The other activities proposed by the company are to provide global networking services, telecommuter support, broadband networking compatibility and also to develop and provide other applications such as video multi-casting, global scheduling and calendaring and distribution over the Internet or virtual private network.

Officials said that the company had also mentioned that it would provide licensed telecommunication services, software services and provision of information networks and all ancillary business activity that is or may be permitted under Indian laws from time to time.

Earlier this year AT&T had announced a S$8.5 billion investment plan worldwide during 2006 and had mentioned that India would be a very important market for it in the Asia-Pacific region. In this joint venture, the company has proposed an initial foreign direct investment worth Rs 18.50 crore that would be 74 per cent of the joint venture company's equity capital of Rs 25 crore, sources said.

More Stories on : Telecommunications | Foreign Direct Investment

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