Government allows 100% FDI in telecom sector

What is the news? 

The Department for Promotion of Industry and Internal Trade (DPIIT) has recently allowed 100 % FDI across all kinds of telecom services and infrastructure providers. 

Earlier status of Telecom sector

Earlier 100 % of FDI was allowed, of which 49 % of investment was permitted through automatic route. 

About the recent changes in the telecom sector

The Department of Telecommunications (DoT) has slashed performance and financial bank guarantee requirements of telecom operators by 80 percent. 

The amendment has been made in both old telecom licences in the UASL (Unified Access Services licences) category and new licences that were started in 2012- Unified Licence (UL) category. 

However, the amendment is subject to the condition that a body of a country, which shares a land border with India or where the beneficial owner of investment into India is situated or is a citizen of any such country, can invest only under the government route. 

What is UASL (Unified Access Services licences) category?

Under this, the country is divided into 22 Service Areas consisting of 19 Telecom Circle Service and 3 Metro Service Areas for providing Unified Access Services (UAS). 

Unified Access Services operators are free to provide services, within their area of operation, which cover collection, carriage, transmission and delivery of voice and/or non-voice messages.

What is the Unified Licence (UL) category?

It is the convergence between various services, networks, platforms, technologies and overcoming the existing segregation of licensing, registration and regulatory mechanisms in the concerned areas. This is done to enhance affordability, increase access, delivery of multiple services and reduce cost. 

Source: This post is based on the following articles 

• “Via automatic route: Govt allows 100% telecom FDI” Published in ‘Indian Express’ on 07 October 2021. 
• “Government allows 100% FDI in telecom sector” Published in Livemint on 07 October 2021.