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India rejects Telstra’s bid to raise JV stake
29 January 2010
The Indian government has turned down a plan that would give Telstra a majority stake in its local offshoot and is reviewing plans by other investors
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[Telstra]
[India]
[Verizon]
[Telcordia]
[Etisalat]
[FIPB]
[foreign investment]
Comment: India appears to be taking a nationalist turn when it comes to telecommunications investments. Over the past few weeks the government has questioned companies that it alleges have provided international services without a licence and is now being stricter with the rules for inward investment. That won’t give confidence for international companies looking at the upcoming bidding for 3G licences.
India has rejected Telstra’s move to raise its stake in Indian arm, Telstra Telecommunication. The Australian telco was seeking to boost its holding to 74% from 49%.
The Foreign Investment Promotions Board (FIPB) has ruled the increase as beyond the limit set by the foreign direct investment law. Telstra’s stake would amount to 61.9% in the Indian unit, if its indirect stake was taken into account.
Meanwhile the FIPB is taking a close look at other foreign investments in Indian telecommunications, from companies such as Etisalat, Verizon and Telcordia.
The FIPB has postponed a decision on UAE-based Etisalat’s application for a share transfer to boost its stake in Etisalat DB Telecom, to 54.27% from the current 49%.
The FIPB has approved Verizon’s transfer of equity shares from a foreign shareholder to a non-resident group in the telecom sector.
The agency has yet to clear Telcordia’s proposal to manage mobile number portability in the country, after the home ministry asked for a review. GTB