FIPB approves nine FDI proposals

Airtel last week had announced that it had signed a deal to take over all of Tikona’s 4G spectrum.
FIPB approves nine FDI proposals

NEW DELHI: The central government on Friday announced the approval of nine foreign direct investment proposals, recommended by the soon-to-be defunct Foreign Investment Promotion Board (FIPB), including five in the telecom sector, including one each from global telecom majors NTT Communications and Vodafone.

The total worth of the proposals approved is Rs 659 crore. Reflecting the ongoing consolidation in the highly-competitive telecom segment post the entry of Mukesh Ambani’s Reliance Jio, four of the five telecom sector proposals involve acquisitions or further expansion of existing shareholdings.

Among the proposals approved is one from Japanese telecom major NTT Communications to increase its shareholding in its India-subsidiary Netmagic Solutions from 81.63 per cent to 100 per cent for a foreign direct investment of Rs 533.83 crore.

Approval has also “been sought by Vodafone India, a 100 per cent foreign owned company, for
acquisition of 100 per cent shares of You Broadband India by way of transfer from resident shareholders and non-resident shareholder,” said an official government statement. Netmagic Solutions is NTT Communications’ India wing and a data-centre firm.

Meanwhile, Vodafone India has received approval for its complete acquisition of YOU Broadband Services, a broadband internet service provider. The approved deal will see FDI worth Rs 55.09 crore. Vodafone had inked the deal with the latter last year after reportedly failing to acquire another internet service provider Tikona Digital.

Airtel last week had announced that it had signed a deal to take over all of Tikona’s 4G spectrum.
“The acceleration you are seeing in telecom deals, both in FDI investments and mergers and acquisitions is primarily a sign of the stress the industry is going through. Most of these companies, even the market leaders, cannot compete with the likes of Jio if they do not consolidate existing resources in the market,” said a senior analyst. 

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