India's government, on Wednesday, gave the go-ahead to Norwegian telecom major Telenor ASA (OTCMKTS:TELNY) to invest 10 billion rupees ($166.5 million) in the Indian telecom sector, which will increase the company’s stake in its Indian joint venture, Telewings, to 74 percent from 49 percent.
India’s finance ministry said in a statement that Telenor’s application “to set up a joint venture company in the telecom sector,” was cleared by the government, Press Trust of India reported.
Telenor, in January, had requested the Foreign Investment Promotion Board, or FIPB, an Indian government body that fast-tracks proposals from foreign investors, to raise its stake in Telewings Communications Pvt Ltd, the company's Indian subsidiary. The FIPB approval came through June 14.
Telenor operates in India under the brand name Uninor, and has a presence in six telecom circles, which include the states of Maharashtra, Gujarat, Uttar Pradesh, Bihar, Jharkhand and Andhra Pradesh.
Telenor is now in the process of transferring Uninor’s business and assets to Telewings, which participated in the auction for 2G spectrum last November, and was awarded airwaves worth 40 billion rupees to offer mobile phone services in those circles.
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Telewings has signed a partnership agreement with Lakshdeep Investments & Finance Pvt Ltd, which contributes the rest of the equity to Telewings, as current rules on FDI in India do not allow a foreign company to hold more than a 74 percent stake in an Indian venture in the telecom sector.