The regulatory environment of telecom sector of India is changing and both national and international telecom companies must be aware of the same. Some of these regulatory requirements are striking at the very root of doing business in India and these must not be ignored at any cost by telecom companies targeting Indian markets.
Firstly, the electronic system design and manufacturing policy of India has been liberalised. The FDI Policy in Telecom Sector of India 2014 (PDF) has allowed 100% FDI subject to FIPB approval and other national security requirements. Similarly, approval to establish two semiconductor wafer fabrication manufacturing facilities in India (PDF) has also been granted by Indian Government.
Secondly, the telecom merger and acquisition guidelines of India 2014 have also been released. This would allow more telecom companies to compete against each other and provide better services to the consumers. This would also require compliance with various techno legal compliance requirements by both national and international telecom companies.
Thirdly, the traditional legal due diligence for telecom sector of India has become redundant these days. Now we need techno legal due diligence for telecom related M&As in India. In appropriate cases, e-discovery practices may also be required to be used regarding telecom M&As in India. In fact, the e-discovery and cyber law due diligence has become indispensable for Indian companies these days.
Fourthly, telecom companies like Huawei, ZTE, Cisco, IBM, Microsoft, Hewlett-Packard, etc may face restrictive regulatory conditions and a meager market share due to involvement of these companies in e-surveillance and eavesdropping related activities. These telecom companies may also fail to comply with Indian laws and various policies as announced by Indian government from time to time.
The present environment is a time of both joy and gloom for foreign telecom companies. Their presence in India would be absolutely dependent how much they comply with techno legal regulatory requirements of India.