Security issues hit telco FDI

Aug 22, 2010 |
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Aug . 22: It is not only BlackBerry which is facing problems over security issues from the home ministry. Due to the tough stand of the home ministry, a number of telecom companies are facing problems in clearing their FDI proposals.

“Since these actions involve security issues, no one knows what is the actual reason behind these decisions. We want the government to take the industry into confidence. We should also know what are the issues,” said Cellular Operators Association of India (COAI), director general, Mr Rajan Mathews.

He said that the hard stand taken by home ministry has caused losses to the operators and delayed the roll out of their services. The very implementation of the mobile number portability (MNP) in the country is doubtful as due to pressure from the home ministry.

The Foreign Investment Promotion Board (FIPB) had revoked the approval given to Telcordia which is the company which has to implement number portability in half of the country. The FIPB has also rejected the fresh proposals from the company as the home ministry refused to give its approval as Telcordia also has operations in neighbouring Pakistan.

FIPB has also been deferring the proposal of another telecom company Etisalat to raise its stake to 54.27 per cent in its Indian venture for eight months now. The home ministry is also concerned over the company’s back-end tie-up with Chinese firm Huawei and about its presence in Pakistan and Afghanistan.

Etisalat has 45 per cent stake in Etisalat DB, earlier known as Swan Telecom. In July, the FIPB rejected the proposal of Bahrain Telecommunications company (Batelco) to hike stake in S Tel as the home ministry was concerned that funds were being routed through Cayman Islands.

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