WorldTel's Rs 2,000-crore ($460 mil) telecom project cleared
world-tel.com
Sharif Rangnekar & Manoj Gairola
NEW DELHI 15 NOVEMBER (et)
FOLLOWING major amendments to its application, WorldTel's investment plans for India have been approved by the Foreign Investment Promotion Board (FIPB) today. WorldTel has been permitted to set up a holding company which would fund, among other things, a backbone of fibre optic cables for Internet services both in south and north India. The total project size is well over Rs 2,000 crore.
The proposal had earlier been kept pending by the FIPB since it lacked clarity and did not meet the foreign direct investment (FDI) norms.
WorldTel had submitted an application seeking a joint venture with Alcot in which it would have held 75 per cent equity, with the balance going to its Indian partner. This venture was to infuse funds in other projects, and hence would have acted as an investing or holding company.
However, the equity pattern did not fit the guidelines for a holding company, which has to be wholly-owned with 100 per cent equity. The FIPB, when it first took up the proposal, said it did not meet norms for either a holding (investing) company or for a telecom service provider. If it were a service provider the FDI cap would have to be 49 per cent.
According to sources, the Secretariat of Industrial Approvals and the Department of Telecommunications (DoT) held a meeting with WorldTel to clarify the situation. The best alternative, obviously, for WorldTel was to float a holding company and then go on to form several joint ventures for its backbone plan.
For now, sources said, WorldTel may infuse about Rs 500 crore and would increase investments from time-to-time depending on the requirements while forming other joint ventures.
WorldTel has big plans for India and the backbone is only the beginning, sources said. Part of the starters includes the many MoUs it has signed with state governments for its backbone plan. The states include Tamil Nadu, Gujarat, West Bengal, Karnataka, Kerala and Andhra Pradesh.
WorldTel intends to expand this list with further MoUs with seven more states ? Maharashtra, Madhya Pradesh, Uttar Pradesh, Rajasthan, Punjab, Orissa and Delhi. Its officials would be initiating such an agreement in the near future, sources said.
A massive project, the backbone will link villages and towns with the Internet service provider (ISP). The access network will provide local connectivity (by-passing DoT) to Internet community centres and dedicated users in each of the towns and villages. Users in any town can access the Internet by making a local telephone call on the DoT network. Sources said, the access network will be a combination of wireless, fibre optic and TV cables. |
