74% telecom FDI close as remote access to foreign firms gets OK

In December last year, the Union cabinet had extended the deadline for telecom operators to comply with the norms for an increased foreign direct investment limit of 74 per cent.

Norms relating to allowing remote access, appointment of foreigners in top positions and taking away veto powers from Indian shareholders with 10 per cent equity in telecom joint ventures are some of the key revisions in the original guidelines that is expected to be notified after the current deadline of April 2 expires, the sources said.

Under remote access, data or calls made on telephone networks in the country could be remotely managed from a site elsewhere. While the original FDI norm under Press Note 5, issued in November 2005, had banned remote access, DoT had proposed to allow it with some restrictions. But security agencies had expressed reservations on the issue.

A group, formed by the Cabinet in December 2006, under National Security Adviser M K Narayanan, has examined security related concerns on remote access to public switched telephone network (landline telecom network).

The Cabinet had earlier referred the issue of remote access with regard to public switched telephone network (PSTN) to a group of officers headed by Cabinet Secretary. The group was given the task of rewriting the remote access guidelines in line with the discussion in the Cabinet.

On all other issues there has already been a broad agreement in the Cabinet.

The DoT is pushing for appointment of foreigners in key positions in telecom companies, subject to security clearance from the Home Ministry annually.

It also wants to do away with the veto power enjoyed by Indian shareholders with 10 per cent equity in joint ventures. On remote access, the department wants a device fitted into the network and monitored by the intelligence agencies.