Why no MNC interest seen in sector, Mayaram questions telecom dept

Written by fe Bureau | New Delhi | Updated: Sep 28 2013, 09:07am hrs
Faced with a lack of interest from telecom companies to invest in India even after the government cleared 100% FDI in the sector in August, economic affairs secretary Arvind Mayaram has written to telecom secretary MF Farooqui to analyse why the sector hasn't attracted Global Fortune 500 and Fortune 500 companies.

Mayaram's letter states that 18 Global 500 companies and six Fortune 500 companies are from the telecom sector, of which 12 companies from the Global 500 and six from the Fortune 500 aren't present in India. The letter asks the department of telecom to assess why major multinational companies do not have a presence in India.

I would request you to have these examined critically from the view point of attracting foreign investment and shall request you for your reasoned comments and suggestions at the earliest, the letter from Mayaram states.

As per findings of the department of economic affairs forwarded to the department of telecom, the cumulative FDI inflows in the telecom sector from April 2000 to March 2013 has been Rs 58,732 crore. The telecom sector has accounted for roughly 7% of the cumulative FDI inflows into the country as on March 31, 2013. Between 2011-12 and 2012-13, there was an 81% decline in FDI inflows in the sector.

The companies identified include Nippon Telegraph and Telephone, SK Holdings, China Mobile Communications, and Deutsche Telekom. Other companies include Mexico's America Movil, China's state-owned telecom operator China Telecommunications and China United Network Communications.