The issue of lowering the FDI cap in tower companies continues.
Prior to this, the Telecom Regulatory Authority of India (TRAI) suggested bringing tower companies under the unified licensing regime. As part of this, the regulator proposed that the FDI cap in this space be lowered from 100 per cent to 74 per cent. In addition, TRAI also proposed that these companies pay an annual revenue share of 8 per cent. Currently, these players are not paying any licence fee.
In a letter written to the Department of Telecommunications (DoT), the Department of Industrial Policy and Promotion (DIPP) has reportedly stated that the proposal to bring tower companies under the unified license regime is problematic.
This is because this step will lower the FDI in the tower space to 74 per cent, which may discourage foreign investors.
In its letter to DoT, DIPP has said that the TRAI has explained the rationale behind its proposals. However, the letter added, it had not elaborated upon the likely impact lowering the FDI limit may have on this space.
