Broadband, internet services set to dominate FIPB meet

Broadband and internet services will be the flavour of the meeting of the Foreign Investment Promotion Board (FIPB) scheduled for the last day of the year, as far as the telecom sector goes.

FIPB, the nodal wing in the finance ministry for clearing foreign direct investment (FDI) proposals, is set to take up several applications related to broadband services in its meeting fixed for December 31.

The summer of 2010 witnessed highly competitive bidding for 3G (third generation) and BWA (broadband wireless access) spectrum, and it’s quite a coincidence that the year would end with so many related proposals being considered by FIPB.

Qualcomm, Augere, Mango group and Netmagic Solutions are among the companies whose proposals are listed for the year-end FIPB meeting. 

Augere, a UK-based company which offers wireless broadband over Wimax platform in the emerging markets, won a licence in the recent BWA auction in India. While Reliance Industries will be the only company to have a pan-India coverage in BWA after it acquired Infotel Broadband which had successfully bid for nationwide spectrum, US-based Qualcomm won 4 licences, Aircel 8, Bharti 4 and Tikona 5.

The 3G and BWA auction fetched the Exchequer more than Rs 1 lakh crore.

Qualcomm is seeking the FIPB nod for foreign equity induction for internet and broadband services for four of its companies—Wireless Business Services Pvt Ltd, Mumbai; Wireless Broadband Business Services (Haryana) Pvt Ltd, Delhi; Wireless Broadband Business Services (Delhi) Pvt Ltd, Delhi; and Wireless Broadband Business Services (Kerala) Pvt Ltd, Delhi. FIPB has deferred a decision on the Qualcomm proposal several times already.

Qualcomm, which had recently said that it would ultimately exit the broadband venture, is said to be exploring stake sale options with many players including Bharti, Aircel and Reliance Communications. Recently, Qualcomm had sold 26% stake to Tulip Telecom and Global Holdings, which is the parent company GTL Ltd (a telecom infrastructure service provider).

Mango Teleservices is yet another company seeking FIPB nod this week. It’s a licensed internet gateway operator in Bangladesh. It provides internet gateway and other services to ISPs.
Also listed for the meeting is the Netmagic Solutions proposal.

Netmagic is a leading managed IT hosting service provider, specializing in internet data centre, managed hosting disaster recovery and infrastructure management. Netmagic has datacenters located in Mumbai, Bangalore, and Chennai as well as a virtual data center in the United States.

In addition to the broadband and internet service related proposals, the application of US-based Verizon Communications is coming up again at the FIPB meeting on December 31.

Decision on the Verizon proposal for transfer of equity shares has been deferred since October 2009. The proposal has been stuck over the Ministry of Home Affairs queries on Verizon’s Pakistan operations. Verizon has an international long distance licence in India in a venture with Videocon.