India Step Closer to Allowing Full Foreign Ownership of Mobile Networks
Published on: 2nd Jul 2013
By: Ian Mansfield
India's Telecoms Commission has endorsed a plan that would allow foreign companies to take full ownership of mobile networks in the country. Currently they are limited to 74 percent stakes.
The limitation has on occasions held back local networks that needed shareholder funding to expand, as the foreign shareholder couldn't inject cash into the company unless their Indian partners also had funds to invest.
A move to lift the limit is expected to allow more investment in the market, while also making it easier for Indian minority shareholders to sell their stakes.
The recommendations by the Telecoms Commission need to be passed to the Department of Industrial Policy and Promotion (DIPP) for review by government ministries before being submitted to the Cabinet for final approval -- or rejection.
The security services have previously expresses concerns about allowing strategic assets being wholly owned by foreign investors, but as those investors can already take management control, it seems unlikely that a 26% shareholder in the firm could block any unwanted activities.