'Banks reluctant to lend to telecom; Cos seek easy ECB norms'
Hyderabad: Telecom firm Uninor on Wednesday said it is in discussions with the government seeking further easing of the external borrowing norms as banks are reluctant to lend money to sector.
The companies are being forced to look for other options such as External Commercial Borrowings, it said.
Uninor Managing Director and Executive Vice President and Head of the Norwegian firm Telenor's Asia operations, Sigve Brekke said the company is holding discussions with the Finance Ministry and the Department of Telecom to relax norms to raise ECBs.
Uninor is requesting the government to lift the USD 750 million cap that currently exists in raising funds through the ECB route.
At present, telecom companies can use funds raised through ECBs only for their capital expenditure and buying spectrum.
"We had several meetings with the Government on this (ECB norms) both with DoT and Finance ministry. The reason for this is that the banks are still reluctant to lend money to telecom sector.
"So, we will have difficulty in funding the spectrum payment," Brekke said in a press conference here today after launching 'Subse Sasta' road show.
Replying to a query, Brekke said that some banks are seeking more regulatory clarity, while others have reached maximum exposure limits to the telecom sector.
The telecom operator, who is preparing to participate in the fresh 2G auctions to be held in November, lost its 22 licences after the Supreme Court in February quashed 122 telecom permits in the 2G spectrum allocation case.
Telecom companies interested in buying spectrum through auction will have to submit their application by October 19. The bidding for the airwaves is scheduled to start from November 12.
The Supreme Court has extended validity of cancelled licence till January 18, 2013.