More foreign investment to be allowed in telecoms

26 Sep 2003

According to a ministerial panel in India, more foreign direct investment (FDI) is to be allowed in the country’s telecoms market in the future. The panel said that the markets need more than USD60 billion over the next ten years to increase the penetration rate, which stood at around 6% at the end of June 2003. It has recommended that the total foreign investment limit be increased from 49% to 74%. The panel also suggested that the rules on mergers should be relaxed and that companies within each of the country’s 22 zones should be allowed to join forces – currently only firms in separate regions are allowed to do so – as long as the number of operators within a zone did not fall below three.