DIPP objects on Foreign telcoms bid for 3G spectrum without an Indian partner

he home ministry and the department of industrial policy and promotion (DIPP) have shot down DoT’s plans to let foreign telcos bid for 3G spectrum without an Indian partner. Telecom secretary Siddarth Behura had recently said that foreign telcos would be allowed to participate in the upcoming 3G auctions on their own, and added that successful bidders would be given time to find JV partners and get the mandatory clearance from the foreign investment promotion board (FIPB).

DoT had reviewed the 3G policy norms after it was pointed out that it may become difficult for foreign players to identify local partners before 3G spectrum bidding at such a short notice. DoT had therefore as a departure from its earlier stand allowed foreign players to participate in the auctioning.

The home ministry is of the view that spectrum cannot be allocated to any player without security clearance for all the partners. Home ministry sources also said that the allowing stand-alone foreign firms to bid as 100% entities would imply a blanket (or blind) security clearance for both the company as well as its potential partners. “Once spectrum is allotted, it could become messy if the foreign company or its partner(s) are considered ‘undesirable’ by the government from the security point of view,’ home ministry sources said.

The DoT had agreed to give this leeway to foreign telcos in a bid to speed up their entry into the Indian market. This is because, with the first round of 3G spectrum auction just a month or two away, several international communication majors had said that it would not be possible to enter into JVs with Indian partners at such a short notice. Foreign telcos had also said that they want to avoid the possibility, where after having tied up with Indian partners, they fail to bag 3G spectrum and then disband their JVs.