New Delhi, November 7:

India today notified a hike in foreign investment cap in the telecom services industry to 74 per cent from the present 49 per cent and said the remaining 24 per cent stake must be held by an Indian entity.

The foreign equity component will include investments by foreign institutional investors, non-resident Indians, foreign currency convertible bonds, American depository receipts and convertible pre-ference shares.

Telecom operators said India is one of the fastest growing telecommunications market and the notification would go a long way in achieving the target of adding some 250 million subscribers by 2007. India currently has a subscriber base of over 115 million, translating into a telecom density of 10.38 per cent. The network expansion cost a whopping $34 billion, as estimated by various associations.

The foreign equity component in public sector banks and Indian financial institutions will be treated as Indian equity in determining the 74 per cent investment cap in telecom companies. “The majority directors on the board, including chairman, MD and CEO shall be resident Indian citizens to be enforced through licence accord,” a press note said.