The Indian government has decided to allow foreign companies to bid in the upcoming 2G spectrum auctions on their own without having to partner a local company, and hopes this will increase participation in the process.
Current rules governing the sector prohibit foreign firms from owning more than 74 percent of an Indian telco, but authorities will not insist on enforcing this as a pre-condition for taking part in the auction, said a senior telecom department official, in a report by the Economic Times (ET) over the weekend.
Successful bidders will likely get a 90-day window to induct a domestic partner and comply with the sectoral cap, said the same official. He added that details would be included in information memorandum that will be circulated to all interested parties on Aug. 27.
The news will be a boost for foreign firms such as Norway's Telenor, which has been locked in a bitter dispute with its current local partner, real estate firm Unitech, in their joint venture Uninor.
Telenor has been pushing to auction off the joint venture's assets, against the wishes of its partner. Telenor is keen to do so, and migrate its business to a new company to start afresh, since Uninor's 22 telecom permits were among the 122 in total that were revoked by the Supreme Court back in February.
The Supreme Court in India had ruled in February that the government had erred in issuing 2G licenses on a first-come-first-served basis, amid allegations of corruption by the telecom minister.