Cabinet gives nod to 74% FDI in telecom

NEW DELHI: Foreign direct investment in telecommunications
is to be raised from 49 per cent to 74 per cent and the Press Note 5 of 2005 which had imposed stiff monitoring needs for telecom service providers will be amended suitably.

The union cabinet in its meeting also announced that remote access to networks in India would be permitted from approved locations. Briefing the media after the meeting, information and broadcasting minister Priyaranjan Dasmunsi said such access will only be allowed to equipment suppliers, manufacturers and affiliates and not for monitoring calls and content.

Operators will be required to keep an audit trail of all remote access activities for six months, send a compliance report twice a year to the government and maintain a “mirror image” of all remote access information for online monitoring.


In the note sent earlier to the cabinet, the Department of
Telecommunications (DoT) had sought the setting up of a centralised lawful interception and monitoring system through which service providers can be monitored from a centralised location.

It was also decided that the chief officer dealing with network operation (network administrator) has to be a resident Indian national, while the chief technical officer may be a foreigner cleared by security agencies.

Vigilance technical monitoring cells of the DoT will be augmented and will have a Director-level representative from security agencies, and will carry out both technical vigilance functions and security aspects of telecom service operators.

The DoT has proposed that it will extend the date of compliance with Press Note 5 (a note on FDI enhancement, which incorporates these security issues on remote access) for three months from 2 April 2007.


A high-level group set up by the Cabinet last December formulated these conditions. The group had been asked to suggest safeguards and examine security conditions on allowing remote access to the country’s telecom network from foreign countries. The National Security Advisor, the Cabinet secretary, and Secretaries of Home, Defence, Telecom, and Finance were members of this group.

Press Note 5, adding pre-conditions for enhancing FDI in telecom to 74 per cent, had been issued in November 2005 but telecom firms opposed various clauses, including one denying remote access to their networks.

Meanwhile, the Associated Chambers of Commerce and Industry of India has lauded the decision of government to hike FDI ceiling in telecom to 74 per cent. ASSOCHAM President Venugopal N. Dhoot said this will result into massive flow of investments in telecom.


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