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Monday, December 21, 1998

Telecom panel eggs Centre to scrap floor on foreign equity 

Sanjay Thapa  
New Delhi, Dec 20: The Industry Group of Telecom, a parallel industry body, has suggested that the government scrap the mandatory requirement of a minimum 10 per cent equity subscription by a foreign partner in basic, cellular, paging and V-Sat services. The group has put forward its suggestions in a proposal to the Planning Commission.

The group, which is supported by the Confederation of Industry and the Federation of Indian Chambers of Commerce and Industry, has also suggested that the licence period for basic services be extended to 27 years from 15 years. This will include a two-year grace period to be utilised for installing infrastructure. The licence tenure for cellular and paging services in metropolitan cities, the group says, should be extended to 17 years from 10 years, again including a two-year grace period. The group has gone along with the widespread industry demand for a two-year moratorium on the licence fee for all operators. It has, however, said that operators' licences should bebankable during the moratorium. The freeze-time on licence fee, it says, needs to given outside the tenure of the licence period.

"These measures will go a long way in ascertaining the long-term viability of telecom operators, and we expect the government to react positively," sources said. The group has also suggested that value-added services like Internet, E-mail, radio transmission and video-conferencing be accorded the status of a core industry.

The group has recommended that the government come out with a financial package to boost the local infotech industry against the backdrop of the impending opening-up of the sector. It has also gone along with the suggestion that the government levy a one-time fee and revenue-sharing formula for cellular companies.

The centre, it says, need not be apologetic about extending a helping hand to the sector as governments all over the world have bailed out telecom operators at one time or the other. The US-based Federal Communications' Commission's example is acase in point, it says.

Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.


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