FDI cap in telecom services likely to stay

By Our Special Correspondent

NEW DELHI, SEPT. 20. The Telecom Commission Chairman, Mr. Shyamal Ghosh, today said the 49 per cent ceiling on foreign direct investment in telecom services was unlikely to be revised upwards.

``I do not think the equity limit will be changed. At least not for the services sector,'' said Mr. Ghosh during an informal interaction with newspersons. Crucial segments such as basic phones, cellular mobile, radio paging and national and international long distance are clubbed under the head of telecom services.

Mr. Ghosh's observation is likely to act as a dampener for U.S. telecom companies that have chafed at the 49 per cent limit arguing that this ceiling has lost its meaning. They point out that other international telecom companies have holdings up to 74 per cent in Indian joint ventures through means they cannot adopt.

However, the Telecom Commission chief, among the officials who had accompanied the Prime Minister to the U.S., feels that there ``seems to be much more interest'' among U.S. companies than during his previous sojourn in June. Lucent, he said, was planning to invest more in its switching manufacturing venture in the country and some international majors were planning to invest in laying down cables. ``The recent reforms have been well taken,'' he said. Mr. Ghosh did not think the entry of more cellular companies apart from the Department of Telecom Operations (DTO) was feasible in the near future due to frequency limitations.

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