Foreign Telecom Firms Pass on India

Foreign companies are steering clear of an auction of Indian mobile-phone bandwidth in a sign of how far the nation's once-booming telecommunications industry has fallen from investor grace.

Australia's Telstra Corp. and Sweden's TeliaSonera AB said they won't participate in the coming sale. Meanwhile, Norway's Telenor ASA threatened to pull out of India, saying that the new base rates proposed by India's telecom regulator for the auctions are far too high. The government expects to complete the auction rules by the end of May, with the auction likely to take place at the end of August. A supporter of telecommunications company Uninor at a demonstration in New Delhi, April 18. India was until recently a favored investment destination for many foreign companies, especially telecom operators who wanted to offset slowing growth in their home markets. Companies such as Singapore Telecommunications Ltd., Japan's NTT DoCoMo Inc. and Britain's Vodafone Group PLC have invested in India directly or through local operators, driving the pace of growth in India's telecom sector to the fastest in the world.