The Hindu Business Line : SingTel Australia’s proposal deferred

New Delhi, March 26 SingTel Australia Holding’s long distance telephony plan seems to have run into a bit of rough weather with the Foreign Investment Promotion Board (FIPB) asking the company to obtain a no-objection certificate from its current Indian partner – Bharti.

SingTel Australia Holding, Singapore, had approached the FIPB, in October last year, for setting-up a subsidiary or joint venture in India entailing FDI up to 74 per cent for offering long distance telephony services, primarily targeting enterprises.

Security concerns

Adding to Singtel’s woes, Ministry of Home Affairs (MHA) is believed to have disfavoured granting security clearance to the proposal on the ground that Indonesia’s business watchdog had found Temasek Holding (promoter of SingTel) guilty of breaching competition rules.

Recommending the proposal be deferred, the board noted that while the issue of competition could be addressed later, a No-objection certificate from Bharti, the joint venture partner, must be obtained as the proposal attracts Press Note 1 (2005 series).

SingTel has identified Leela Lace Software Solutions and Bharti Enterprises Ltd as its Indian partners who would hold collectively 26 per cent of the share capital of the joint venture company to be set up in India. Sources said that the company has clarified that the joint venture would apply for a full-fledged national long distance, international long distance and Internet service provider licences. Sources, however, pointed out that the nuances of the particular services to be delivered through the joint venture would be based on commercial understanding between Bharti Group and SingTel.

DoT stand

During the deliberation at a meeting held in March 2008, the Department of Telecom said it had no objection to the proposal entailing 74 per cent FDI on the condition that the new venture would provide services covered under NLD, ILD and ISP and would not provide any service covered under Unified Access Licence; and that the investor would adhere to Press Note 3 of 2007 and also the licence conditions as well as licence conditions.