Wednesday, February 26, 2014

Telecom Environment In India Is Changing

Indian telecom environment is all set for a big overhaul after many scams and irregularities. On the one hand Indian government is encouraging electronic system design and manufacturing in India whereas on the other hand it is fine-tuning the telecom regulatory environment of India. The new merger and acquisition (M&A) guidelines issued by Indian government is seen as a pro active step by many telecom stakeholders.

The FDI policy for telecom sector of India 2014 (PDF) has also been made liberal by enhancing the limits of FDI in telecom sector of India. Indian government has also given approval to establish two semiconductor wafer fabrication manufacturing facilities in India (PDF).

At the same time regulatory compliances have also significantly increased in India in the telecom related fields. For instance telecom due diligence compliances is required to be ensured by foreign investors and those interested in M&A with Indian companies. Further, telecom stakeholders exploring the M&A route must also comply with the Internet intermediaries requirements and cyber law due diligence requirements (PDF) as prescribed by the Information Technology Act, 2000 (IT Act 2000).

The reaction of national and international telecom stakeholders are mixed in nature. Some have considered these steps as reformatory while others believe that these steps would not make much change in the existing circumstances and telecom environment. Only time would tell who is right in this regard.