India considering full foreign ownership of operators

India’s Telecom Commission has endorsed plans to allow foreign firms to wholly own mobile operators in the country. Currently, the level of foreign direct investment (FDI) permitted in operators stands at 74 per cent, but it could soon be increased subject to Cabinet approval.

Several European operators are currently present in India, including Vodafone, Telenor and Sistema, as is Malaysia’s Maxis. However, they have had to partner with local firms in order to acquire telecoms licences and it has not been an easy road for them.

Each have had licences that they bought in the 2008 2G spectrum auction revoked by India’s Supreme Court over corruption allegations. The situation was so severe that Middle Eastern operators Etisalat and Batelco, which had their own JVs in India, exited the market following the cancellation of their licences.

According to the Times of India, Maxis is preparing to invest $900m into Indian operator Aircel, which it already owns 74 per cent in.

The Department of Telecom, the body under which the Telecoms Commission runs, said that it will now send a detailed note to the Department of Industrial Policy and Promotion before raising the issue with the Cabinet.

Meanwhile Vodafone has been embroiled in a long running $2.2bn tax dispute with the Indian government. The UK headquartered group is in another dispute with the government over the renewal of its licences in Mumbai, Kolkata and Delhi this week reportedly offered to pay Rs40bn to extend those licences.