Telecom tower companies have opposed a proposal to bring down foreign direct investment (FDI) cap from 100 per cent to 74 per cent for telecom infrastructure companies.

The Telecom Regulatory Authority of India has suggested this move to bring FDI norms for the telecom infrastructure segment at par with service providers.

If implemented, this will impact foreign tower companies such as American Tower Corporation which will have to get an Indian partner. It will also affect Indian telecom firms that are looking to raise funds by selling equity to strategic investors.

“Bringing in 74 per cent FDI cap is detrimental to the growth of infrastructure and will discourage investment in the sector. Further, this goes completely against the FDI policy of the country, announced last month by DIPP (Ministry of Commerce) where, after consideration of the need to attract investment into Telecom Infrastructure, the existing 100 per cent investment has been retained,” said Mr Umang Das, Director-General, Tower and Infrastructure Providers Association (TAIPA).

The tower companies also said that proposal by TRAI to force telecom infrastructure providers (IPIs) to migrate to a “Unified Licence” for which they should pay 8 per cent of revenue as licence fee was unjustified and retrograde.

“These recommendations are more surprising since the Minister of Telecom, Mr Kapil Sibal, has already announced after conducting an industry open-house for a detailed examination of the issue of bringing IPI players under licensing regime by DOT and till that time had advised the matter be kept in abeyance,” TAIPA said.

The licence fee puts additional burden on the tower firms that are already reeling under the impact of 2G licence cancellation and poor 3G roll out.

>tkt@thehindu.co.in

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