Srinagar (India), Sep 15 (EFE) .- The Government of India on Wednesday announced a package of assistance to facilitate the telecommunications sector, including a four-year ban on payments for radio waves and automatic recognition of 100 per cent foreign direct investment.
The approval of 100 per cent foreign direct investment (FDI) under the automated route will allow foreign investors to declare to the Central Bank of India after the investment, without the need for prior approval, seeking to encourage investment in the sector with liquidity issues.
“In the telecom sector, only 49% of 100% FDI was automated. Today, the Cabinet has allowed 100 per cent foreign direct investment through automation,” Telecommunications Minister Ashwini Vaishnav said.
The government also approved a four-year ban on annual payments, gross revenue and spectrum to address the cash flow needs of telecom service providers.
This extended the offer of radio waves in future auctions to 20 to 30 years, eliminated fees for spectrum usage and allowed operators to share for free.
The relief comes just months after the Supreme Court of India ordered Bharti Airtel and Vodafone Idea to repay billions of dollars in debt after a long-running dispute.
Today’s announcement had an impact on shares of telecom companies, with Bharti Airtel and Vodafone Idea closing at 4.5% and 2.9%, respectively.
Since the entry of billionaire Mukesh Ambani’s giant Reliance Jio into the market in 2016, almost all the big and small telecom companies have been fighting for their livelihood.
Reliance Jio’s entry drove some competitors out of the market after falling profits and accumulating debt.
According to the government, the reform measures approved at the cabinet meeting will further increase the proliferation and penetration of broadband and telecommunications links in the country.
“The package is expected to promote 4G growth, promote cash flow and create a conducive environment for investment in 5G networks,” the telecom ministry said in a statement. EFE
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