As reported by TelecomTiger earlier, India’s telecom sector or rather the goldmine for investors called Indian telecom sector is up for grabs to foreign investors both existing and new who can now benefit from the change in foreign direct investment (FDI) norms announced by the government today.

The Cabinet Committee on Economic Affairs (CCEA) today said that henceforth indirect investment will be treated as separate and not be included in sectoral ceilings. The foreign investment through (an) investing Indian company would not be considered for (calculating) the indirect foreign investment in (the) case of Indian companies '''owned and controlled' by resident Indian citizens and Indian companies owned and controlled ultimately by resident Indian citizens," said the new guidelines.

The approval is in lines with recommendations from group of ministers headed by Pranab Mukherjee which too advocated for such relaxations to foreign investors.

A direct implication of this means that existing foreign investors in Indian telcos can increase their stake through the indirect mode. This can now effectively go upto 98 percent. Current the ceiling is 74 percent including indirect mode.

For instance SingTel can acquire more stake from Bharti in Bharti Airtel. Sistema too can raise its stake in its venture with the Shyam group. The Indian players stand to gain a premium for their stake.

India.s telecom sector had witnessed FDI of $ 5.8 billion last year with major global players like Etisalat, Telenor and NTT DoCoMo entering the country.