FDI increases in telecom sector, despite hiccups

The four-month period from January to April 2001 attracted more Foreign Direct Investment (FDI) than the combined inflow during 1999 and 2000 in the telecom sector. This has been in the wake of the policy and regulatory hiccups that the sector has faced recently.

In addition, domestic investments also remained steady and are now poised for a major upswing with the issue of fresh licenses for basic, cellular services and entry of companies into National Long Distance

(NLD) operations.

The Department of Telecom's (DoT) figures also reveal that the inflow during January-April 2001 amounted to Rs 534.6 crore in the two previous years. In 1999, FDI inflows stood at Rs 212.7 crore, which improved to Rs 288.6 crore in the subsequent year.

In fact, over the past decade, the total FDI inflow into the Indian telecom sector has reached Rs 5,044.3 crore. This is nearly one-third of the total private sector investment of Rs 16,564.38 crore in telecom up to March 31, 2000.

Of the entire FDI inflow of Rs 5,044.3 crore, the basic telecom sector cornered just Rs 393.70 crore. On the other hand, cellular mobile services took the lion's share with Rs 2,215 crore or nearly 44 percent. DoT has also said that foreign investment in holding companies, which invest in telecom outfits, stood at Rs 1,361.80 crore (27 percent) to take the second slot sector-wise.