The government’s decision to allow full FDI in telecom is expected to bring in fresh funds and high confidence to the sector. The union Cabinet decided to increase FDI cap in telecom to 100% from 74%, up to 49% via automatic route and beyond that through the Foreign Investment Promotion Board. Industry experts believe the sector can now garner the much-needed additional funds, and the new norms will help bring in more consolidation and buyouts in the telecom space.
According to Sanchit Vir Gogia, Chief Analyst & CEO of Greyhound Research, 100% FDI will be a game changer as far as technology in telecommunication sector is considered. “Right now, telcos are facing money crunch especially in tier 2 and tier 3 cities. FDI will bring in enough funds for the sector and will improve the technology of the sector,” he says.
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