The Department of industrial policy and promotion (DIPP) and Home Ministry has reportedly opposed the Department of Telecommunication’s (DOT) plans to allow foreign players bid for 3G spectrum without a local partner.

Expressing its concerns, the DIPP opines that the bidding flexibility given to foreign players is not practiced in any other industry. Owing to security concerns, DIPP believes that there should be no exception of norms in Telecommunications sector.

DIPP has pointed out the Foreign Direct Investment (FDI) policy that allows only 74% foreign investments in telecom. But DoT had made it clear that it has taken such decision just owing to the shortage of time as the foreign players will have to strike a deal with Indian partners before they start the operations. The successful bidders would be given time to find Joint Venture partners and get the mandatory clearance from the foreign investment promotion board (FIPB).

DIPP argued saying that it doesn’t make much of a difference as allowing a foreign company bid on its own implies 100 % FDI which is actually a violation of a FDI norm.
 
The Home Ministry strongly opposing the DoT’s decision has said that no foreign player shall acquire the spectrum allocation without the prior mandatory clearances for its Indian partner. The Home ministry also fears that the situation can become muddled up once the spectrum is allocated as few companies can be found as ‘undesirable’ from the security perspective.

Earlier, with the intervention of the minister of communications for state, Jyotiraditya Scindhia, DoT had to review the 3G policy as matters were raised against the 3G policy norms which made it difficult for the foreign telcos to close the deals with the local partners in such short notice. DoT then changed the earlier norms and allowed the foreign players to bid on their own.

On the flip side, Foreign Players have something to say here as they fear that if they fail to come up as successful bidder after forming a JV with Indian local partners, it would be difficult for them too as the JV would make no sense at all.

DoT seems to be fishing in troubled waters since the time it has expressed its ambitious 3G plans. It has been on a gunpoint every time it managed to cross one hurdle. No one has spared DoT, not even its colleague portfolios like Finance Ministry and Home Ministry. TRAI started the proceedings and from time to time, different bodies like GSM-CDMA lobbies, foreign telcos, and many others have been jointly making an honest effort to criticize DoT and its never-to-be-appreciated policies.  X

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Foreign telcos bid in 3G auction sans local players