M A I N   N E W S

A Tribune Special
Security objections go; foreign
players set to enter telecom sector
Swati Chaturvedi
Tribune News Service

New Delhi, September 10
The Ministry of Home Affairs and the Ministry of Defence have quietly dropped their “security objections’’ to the government’s terms to raise the foreign direct investment (FDI) limit to 74 per cent and despite, the Left’s opposition the government is all set to raise the FDI cap.

Authoritative sources said the BSNL would initially be left out of the purview of the investment process “but the amendment is being left suitably vague as to allow for review”.

What caused the various security agencies to drop their vehement objections to allow the entry of foreign players remains shrouded in mystery. But last week it was formally communicated to the government that they no longer had any objections to allowing the entry of foreign players.

Despite, strenuous efforts by the last NDA government the security agencies have been steadfast in their objections citing the case of the United States which has capped the FDI at 20 per cent in the telecom sector. Twice recently the matter came back to the Cabinet with the agencies not budging.

The Left which had also been clinging to the security objections is now completely isolated. A.S. Bardhan when asked by The Tribune what their reaction would be seemed resigned today and said: “The increase in the FDI is already a reality in the case of a company like Hutch. If the UPA goes ahead what can we do. On principle we remain completely opposed to it and we will convey our objections,’’ he said.

The government haste is evident in the fact that Telecom Secretary Nripendra Mishra wrote a demi-official letter on July 28, received by the ministries concerned at 7.30 pm which demanded their opinion by July 30 failing which they would be considered in agreement.

In the case of the BSNL, the sources point out that the private players, including Hutch and Reliance, are extremely threatened by their plan to extend their mobile service Cell one.

BSNL has already laid a fibre optic cable network of 4.5-lakh km, while all the private players put together have managed only one lakh kilometres. Says a senior official: “There is clearly an invisible hand guiding all these decisions otherwise why does a strong company like the BSNL be made to go the VSNL way”.

This view found an echo in the standing committee on telecom held yesterday with MPs asking the government tough questions as to why and how the earlier misgivings of the security agencies have disappeared. The government has been extremely circumspect about the new review of the security agencies fearing an outcry.

The sources say that there may be token opposition strictly in public by the Left but as of now the hiking of the FDI in telecom is all set to happen.

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