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'Ambiguities cloud US telecom investment?

Spectrum and lack of clarity in FDI act as barriers for US cos waiting to invest in Indian telecom, David Gross tells M Rajendran.

india Updated: Feb 27, 2006 17:54 IST

Spectrum and lack of clarity in FDI regulations are major impediments for US companies waiting to invest in telecom sector in India. In a candid interview, Ambassador David A Gross, United States Coordinator for International Communications and Information Policy told MRajendran that he was willing to speak to anyone to remove any concerns in offering remote access to foreign carriers.

Excerpts:

It seems the euphoria of US investment in the 1990s, particularly in the telecom sector, has evaporated. There are no major US investments in the Indian telecom service market. Do you think there is a need for introspection and what could be done to improve it?

The issue of infrastructure investment is always a complex one. Many US companies that manufacture telecommunication equipment, particularly for ICT, have made major investments in India. Recent ones include Motorola, Intel, Microsoft, AMD and others. The US carriers are very pleased with government’s direction to increase FDI from 49% to 74%. But there are some doubts about licence terms for foreign investments. I think it would be hard for the US or many other global companies to make substantial equity investments without clear guidelines. Generally, India does well in rule of law, regulatory environments, its competitive nature of the industry and a whole host of economic issues.

It is not just about the regulatory or a single legal issue, but without a clear position, FDI will not happen. Are specific issues like control on remote access of ILD carriers a major impediment?

From the discussions I had with a few carriers and Indian officials, it appears that this is a substantial impediment to po tential investment in construction of new facilities, new networks by non-Indian companies. I think there may be bit of misperception. As far as I know there are no governments in the world that prohibit remote monitoring and maintenance in a way that it appears to be in the new Indian regulations. It is a particular problem because of the way these networks operate, they require that sort of remote access in order to operate efficiently on a global basis. Like global Indian networks should be able to operate even when they are elsewhere from operation centres in places like India so these worldwide networks should be able to operate without having to have restrictions. US-India ICT Group was set up last year to solve critical issue on telecom and IT.

Do you see a bigger role for this group under these circumstances?

I had discussions on Thursday with Indian government officials about broadening the text of the issue that we will be talking in future. Some of the issues on which we will be talking would be on video programming, also referred to as uplinking and downlinking related issues. This, we feel, will be an appropriate forum for further discussions on those issues, as the Indian government goes through the process of defining what the terms and regulations are associated for the services. Since 2002, several reports have suggested that US Embassy in India was strongly aligned with Qualcomm to promote CDMA technology.

Recently, a GSM equipment manufacturer of US had objected to it and was a major embarrassment for the US administration. What is your stand on this?

It is an issue that I have spent a lot of time talking about with many different players. The US position ever since I took over in 2001 is we are technology neutral and we do not believe that any one technology is the answer for any country. Although Qualcomm provides very good equipment and has a very good technology, we think GSM is quite good as well and we think other technologies are also quite good. I believe the largest holder of intellectual property for the GSM system is a US company. So, US for many reasons is very balanced in its views, we think that the correct approach is that governments — US, Indian, European or Chinese — should not dictate what technologies must be used by the carriers. We think the best way is to provide a framework that allows the carriers to present a technology close to the customers so as to allow them to pick and choose and change overtime for the technology they wish to use. I am willing to talk to any one in India about this issue.

Is that a solution for India to adopt?

Here in India it is particularly a controversial issue because of the spectrum problem. We think the path forward is to always give as much outage of spectrum as possible and give the carriers the flexibility of how they use this spectrum. US also does not have answers to all the spectrum questions, we are in discussion with carriers, regulators and governments all over the world, including India, to find what could be the global best practice. We do it bilaterally and also at multilateral institutions like International Telecommunications Union.