(a) whether the Government has relaxed the norms for remote access in telecom sector as
reported in the ‘Times of India’ dated March 3, 2007;
(b) if so, the details thereof; and
(c) the steps taken or proposed to be taken by the Government to boost Rural Telephony?
MINISTER OF THE STATE IN THE MINISTRY OF COMMUNICATIONS AND INFORMATION TECHNOLOGY
(DR. SHAKEEL AHMAD)
(a) & (b) To enable a sustainable growth in Telecom Sector and also in IT sector which is
dependent on telecom, Government has reviewed the FDI policy and issued revised guidelines
vide Press Note No. 3 (2007 series) dated 19-04-2007. Remote Access has been addressed in
Paras 2B (xi) to (xv) of Press Note No. 3 (2007). A copy of the Press Note is given in the
Annexure.
(c) Government has taken the following steps to boost rural telephony:
# Provision of Village Public Telephones(VPTs) in all the remaining uncovered
eligible villages, excluding villages having less than 100 population, lying in
thick forest areas/naxalite infested areas etc.
# Provision of Rural Community Phones (RCPs) with population more than
2000 and where there are no Public Call Offices (PCOs).
# Replacement of Multi-Access Radio Relay (MARR) VPTs.
# Provision of Rural Individual Phone Connections (RDELs) on demand in
1685 commercially unviable Short Distance Charging Areas (SDCAs),
through subsidy from Universal Service Obligation (USO) Fund.
# Large scale deployment of Wireless in Local Loop (WLL) network in rural
areas by BSNL.
# Creation of general infrastructure in rural and remote areas for development of
telecommunication facilities.
# Relaxation of outdoor cable norms to 5 kms. as against earlier norms of 2.5
kms. for landline exchanges by BSNL.
# A scheme has been launched to provide support from USOF for setting up
7871 shared infrastructure sites for mobile services in rural and remote areas,
presently not covered by mobile services. The sites shall be set up
progressively by 2008.
ANNEXURE
Government of India
Ministry of Commerce & Industry
Department of Industrial Policy & Promotion
SIA (FC Division)
PRESS NOTE NO. 3 (2007 SERIES)
Subject: Enhancement of the Foreign Direct Investment ceiling from 49 per cent to 74 per
cent in the Telecom sector – revised guidelines
The Government, vide Press Note 5 (2005 Series) dated 03-11-2005, had notified the
enhancement of Foreign Direct Investment (FDI) limits from 49 per cent to 74 per cent in
certain telecom services subject to specified conditions.
2. The Government has on a review of the policy in this regard, decided to enhance the
Foreign Direct Investment limit from 49 per cent to 74 per cent in telecom services subject
to the following conditions:
A. Foreign Direct Investment (FDI):
(i) The enhancement of the FDI ceiling will be applicable in case of Basic, Cellular,
Unified Access Services, National/International Long Distance, V-Sat, Public Mobile Radio
Trunked Services (PMRTS), Global Mobile Personal Communications Services (GMPCS) and other
value adder Services.
(ii) Both direct and indirect foreign investment in the licensee company shall be counted
for the purpose of FDI ceiling. Foreign Investment shall include investment by Foreign
Institutional Investors (FIIs), Non-Resident Indians (NRIs), Foreign Currency Convertible
Bonds (FCCBs), American Depository Receipts(ADRs), Global Depository Receipts (GDRs) and
convertible preference shares held by foreign entity. Indirect foreign investment shall
mean foreign investment in the company/companies holding shares of the licensee company
and their holding company/companies or legal entity (such as mutual funds, trusts) on
proportionate basis. Shares of the licensee company held by Indian public sector banks
and Indian public sector financial institutions will be treated as ‘Indian holding’. In
any case, the ‘Indian’ shareholding will not be less than 26 percent.
(iii) FDI up to 49 percent will continue to be on the automatic route. FDI in the licensee
company/Indian promoters/investment companies including their holding companies, shall require
approval of the Foreign Investment Promotion Board (FIPB) if it has a bearing on the overall
ceiling of 74 percent. While approving the investment proposals, FIPB shall take note that
investment is not coming from countries of concern and/or unfriendly entities.
(iv) The investment approval by FIPB shall envisage the conditionality that Company
would adhere to licence Agreement.
(v) FDI shall be subject to laws of India and not the laws of the foreign country/
countries.
B. Security Conditions:
(i) The Chief Officer Incharge of technical network operations and the Chief Security
Officer should be a resident Indian citizen.
(ii) Details of infrastructure/network diagram (technical details of the network) could
be provided on a need basis only to telecom equipment suppliers/manufacturers and the
affiliate/parents of the licensee company. Clearance from the licensor (Department of
Telecommunications, Government of India) would be required if such information is to be
provided to anybody else.
(iii) For security reasons, domestic traffic of such entities as may be identified/
specified by the licensor shall not be hauled/routed to any place outside India.
(iv) The licensee company shall take adequate and timely measures to ensure that the
information transacted through a network by the subscribers is secure and protected.
(v) The officers/officials of the licensee companies dealing with the lawful interception
of messages will be resident Indian citizens.
(vi) The majority Directors on the Board of the company shall be Indian citizens.
(vii) The positions of the Chairman, Managing Director, Chief Executive Officer (CEO) and/or
Chief Financial Officer (CFO), if held by foreign nationals, would require to be security
vetted by Ministry of Home Affairs (MHA). Security vetting shall be required periodically
on yearly basis. In case something adverse is found during the security vetting, the direction
of MHA shall be binding on the licensee.
(viii) The Company shall not transfer the following to any person/place outside India:
(a) Any accounting information relating to subscriber (except for international
roaming/billing) (Note: it does not restrict a statutorily required disclosure of financial
nature); and
(b) User information (except pertaining to foreign subscribers using Indian Operator’s
network while roaming).
(ix) The Company must provide traceable identity of their subscribers. However, in case
of providing service to roaming subscriber of foreign Companies, the Indian Company shall
endeavour to obtain traceable identity of roaming subscribers from the foreign company as a
part of its roaming agreement.
(x) On request of the licensor or any other agency authorized by the licensor, the
telecom service provider should be able to provide the geographical location of any subscriber
(BTS location) at a given point of time.
(xi) The Remote Access (RA) to Network would be provided only to approved location(s)
abroad through approved location(s) in India. The approval for location(s) would be given
by the Licensor (DOT) in consultation with the Security Agencies(IB).
(xii) Under no circumstances, should any RA to the suppliers/manufacturers and
affiliate(s) be enabled to access Lawful Interception System (LIS), Lawful Interception
Monitoring (LIM), Call contents of the traffic and any such sensitive sector/data, which
the licensor may notify from time to time.
(xiii) The licensee company is not allowed to use remote access facility for monitoring
of content.
(xiv) Suitable technical device should be made available at Indian end to the designated
security agency/licensor in which a mirror image of the remote access information is
available on line for monitoring purposes.
(xv) Complete audit trail of the remote access activities pertaining to the network
operated in India should be maintained for a period of six months and provided on request
to the licensor or any other agency authorized by the licensor.
(xvi) The telecom service providers should ensure that necessary provision (hardware/
software) is available in their equipment for doing the Lawful interception and monitoring
from a centralized location.
(xvii) The telecom service providers should familiarize/train Vigilance Technical Monitoring
(VTM)/security agency officers/officials in respect of relevant operations/features of their
systems.
(xviii) It shall be open to the licensor to restrict the Licensee Company from operating in
any sensitive area from the National Security angle.
(xix) In order to maintain the privacy of voice and data, monitoring shall only be upon
authorization by the Union Home Secretary or Home Secretaries of the States/Union Territories.
(xx) For monitoring traffic, the licensee company shall provide access of their network
and other facilities as well as to books of accounts to the security agencies.
(xxi) The aforesaid Security Conditions shall be applicable to all the licensee companies
operating telecom services covered under this Press Note irrespective of the level of FDI.
(xxii) Other Service Providers (OSPs), providing services like Call Centres, Business
Process Outsourcing (BPO), tele-marketing, tele-education, etc. and are registered with DoT
as OSP. Such OSPs operate the service using the telecom infrastructure provided by licensed
telecom service providers and 100% FDI is permitted for OSPs. As the security conditions are
applicable to all licensed telecom service providers, the security conditions mentioned above
shall not be separately enforced on OSPs.
3. The conditions at para 2 above shall also be applicable to the existing companies
operating telecom service(s) with the FDI cap of 49%.
4. The relevant provisions of FDI policy for ‘investment companies’, as given in Press
Note 2 (2000 series) dated 11-02-2000 issued by Department of Industrial Policy and Promotion
will no longer be applicable to telecom sector.
5. Press Note 15(1998 series) and Press Note 2 (2000 series) issued by Department of
Industrial Policy & Promotion stand modified to the above extent.
6. An unconditional compliance to the aforesaid conditions shall be submitted by the
existing telecom service providers to the licensor within 3 months from date of the Press
Note and, thereafter, compliance report shall be submitted on 1st day of July and January
on six monthly basis.
7. Press Note 5 (2005 Series) dated 03-11-2005 stands superceded by this Press Note.
Sd/-
( Gopal Krishna )
Joint Secretary to the Government of India