Telenor stake hike in Unitech's arm awaits govt's nod

Govt awaits interior min nod to clear Telenor deal
India's finance ministry is waiting for comments from the home ministry before deciding whether to approve an increased investment by Norway's Telenor in local telecom carrier Unitech Wireless, a minister said on Friday.

Telenor has a 49 percent stake in Unitech Wireless, the telecoms arm of Unitech Ltd, and has an agreement to lift that to 67.25 percent, which would bring its total investment to 61.2 billion rupees ($1.3 billion).

Under India's foreign investment rules, telecoms firms can sell up to a 49 percent stake to foreigners under an "automatic" route but need clearance from the Foreign Investment Promotion Board (FIPB), an arm of the finance ministry, to go above that level.

Foreign ownership in telecoms firms is capped at 74 percent.

Earlier, the FIPB had deferred its decision on Unitech Wireless' proposal to increase foreign holdings in the company to up to 74 percent, without giving any reason.

"The proposal was deferred for want of comments from ministry of home affairs," Junior Finance Minister Namo Narain Meena said on Friday in a written reply to a question in the Parliament, without elaborating.

A spokesman for Unitech Wireless declined comment when asked why the company was seeking approval to increase foreign holdings to up to 74 percent, but said there was no change in Telenor's proposed stake buy of a total 67.25 percent.

The Economic Times reported on Thursday that the government was set to give security clearance to Telenor on condition that none of the staff who have worked in the company's Pakistan operations are employed in India.

Indian media reports have cited Telenor's operations in Pakistan as raising security concerns for Indian authorities.
(US$=48.17 rupees)