Trai favours lowering FDI cap in telecom tower cos to 74%

Trai has suggested bringing down FDI limit for infra providers for telecom services to 74%.

Written by Agencies | New Delhi | Published: May 14, 2012 6:24 pm

Trai has suggested bringing down the FDI limit for infrastructure providers for telecom services to 74 per cent from 100 at present,within a period of three years after Unified Licensing regime comes into force.

The Department of Telecommunications (DoT) on May 2 had sought clarifications on its recommendation on “Guidelines for Unified Licence/Class Licence and Migration of Existing Licences” issued by Trai on April 16.

“In case of IP-I (Infrastructure Providers),it should be mandated that the limit of FDI should be brought down to 74 per cent within a period of three years of Unified Licensing regime coming into force,” Telecom Regulatory Authority of India said in its response to concerns raised by DoT.

The DoT has asked Trai to reconsider its recommendation on Unified Licences for IP-I companies (also known as telecom towers),since lowering of Foreign Direct Investment (FDI) in these companies will “adversely” impact investment in infrastructure.

Trai estimates that bringing IP-I under the licensing regime will fetch the government revenues of around Rs 1,900 crore per year.

As per the recommendation,those companies who either want to provide telecom services themselves or are in the business of selling,leasing or renting their infrastructure to other telecom licensees,will need to have Unified Licence.

Under licence condition,these companies will have to pay a proposed 8 per cent annual licence fee on adjusted gross revenues which they are not required to pay at present.

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