Norms for overseas telecom takeovers eased

NEW DELHI, AUGUST 9: The Union Government has liberalised the norms for telecom companies to acquire and transfer foreign equity, and perm...

NEW DELHI, AUGUST 9: The Union Government has liberalised the norms for telecom companies to acquire and transfer foreign equity, and permitted Internet service providers ISPs to set up landing stations for submarine cables. The government has also allowed the paging companies to switch over to revenue-sharing arrangement from present licensing system, with effect from August 1999.

Announcing the decisions taken by the Union Cabinet on Tuesday night, Parliamentary Affairs Minister Pramod Mahajan said that as per the restructuring guidelines, Indian telecom players would be allowed to acquire the shareholding of their foreign partners or substitute them with others with the same equity limit.

The Minister added that the transfer of equity between existing Indian promoters would be permitted provided majority partner continued to hold the present shareholding for not less than five years from the date of licence agreement.

The decision was taken in pursuance of the announcement made by Prime Minister Atal Behari Vajpayee at the conference of the state information technology ministers on July 15 last.

The decision to allow paging companies to switch over to revenue-sharing mode is expected to give a boost to the crisis-ridden paging industry. The revenue-sharing mode will also help the industry to reduce operating cost.

Mahajan said under the new arrangement government would waive the WPC charges of Rs 100 per subscriber per annum.

He added that the decision of allowing setting up landing stations for marine cables will increase the bandwidth connectivity for the country. The ISPs will also be permitted to lease their bandwidth to other users to make the services cost-effective, he added.

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Mahajan said the government would also consider a proposal of allowing satellite gateways owners to share their bandwidth with other users at the next cabinet meeting. The guidelines for monitoring from the security angle and prevention of carriage of voice traffic would be framed in next three months, he said.

According to official estimates, the country8217;s bandwidth has to increase manifold to meet the new demand from convergence of IT, communication, broadcasting and other technologies.

Mahajan said that government under Article 253 would bring in a legislation in Parliament that would allow the Centre to implement any global treaty and convention. Thereafter, the state governments would have to adhere to the legislation. He added quot;we plan to bring in this legislation in the next session of Parliament.quot;

The government, he said, had also decided to drop the inquiry against former Union Minister Kalpanath Rai in connection with a sugar import scam in the early 90s. Mahajan said since Rai had died and no investigation was possible against him.