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Thursday, 23 February 2012 00:00
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Telenor, Qualcomm say India story still compelling

At a time when the global outlook continues to remain troubled and foreign investors are full of stories of how India has lost its mojo, PMEAC's projections of $50 bn FDI inflows in 2012-13 look hugely optimistic. More so when you keep in mind that, after Vodafone won a long and bruising
battle against the taxman in the Supreme Court, the government has filed a review petition; or considering that the government has no plans to refund the entry fees it got from investors, Indian and foreign, whose telecom licenses were cancelled by the Supreme Court. Yet, going by two ongoing cases, it appears investors are not willing to give up on India either.

Qualcomm, for instance, has not been able to get its BWA licenses for 20 months though it paid $1bn in a government auction – the telecom ministry has sent its JV partner a Rs 264 crore notice for taxes for a period for which dues had been settled (url of All lines still busy). Even though Qualcomm thinks the demands are flaky, it has lost Rs 1,000 crore already (at a 10% cost of money), so it has offered to pay Rs 410 crore of 'dues' provided it gets it licenses immediately. Norway's Telenor, similarly, stands to lose several billion dollars of investment into Uninor but still wants to take part in the 2G auction. While it's wise not to keep testing investor patience, it's good to distinguish between investors. If FDI in the form of Russia's Sistema and UAE's Etisalat were hit by the SC 2G ruling, FDI in the form of investors in Bharti Airtel and Vodafone is equally thrilled that the ruling sought to
undo the injustice done by A Raja in 2008. Perhaps why, though investor sentiment is at an all-time low, $35 bn of FDI has already come in April to December 2011.


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