Cabinet approves 74 p.c. FDI in telecom

NEW DELHI: The Cabinet has approved increasing the foreign direct investment in telecommunications from 49 per cent to 74 per cent.

The Cabinet clearance came after the Department of Telecom (DoT) and security agencies reached a consensus on allowing remote access with certain safeguards.

The changes in Press Note 5 of 2005, to increase the FDI limit in the sector got delayed due to stiff opposition from the Ministry of Home. However, after consultation with the telecom operators and Ministry officials the Cabinet had reached in to a consensus on it.

The Ministry of Information and Broadcasting informed that remote access to networks in India would be permitted from approved locations. However, the access will only be allowed to equipment suppliers, manufacturers and affiliates and not for monitoring calls and content.

In the note for the approval of the Cabinet, the Department of Telecommunications (DoT) had also called for the setting up of a centralised lawful interception and monitoring system through which service providers can be monitored from a centralised location.

With this approval foreigners are allowed to hold key positions in telecom companies. But this would be subject to the clearance from the Ministry of Home on a yearly basis.

The key positions, which could be held by a foreigner would be the chairman, managing director, and CFO. However, the chief officer-in-charge of technical network operations and the chief security officer have to be resident Indian citizens.

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