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Spectrum auction: Govt mulling secured bank loans for telcos

Last Updated: Tuesday, June 12, 2012 - 21:15

New Delhi: Discussions are on at the government level to facilitate secured bank loans for telecom companies which will participate in the upcoming spectrum auction and the modalities in this regard are expected to be finalised within a couple of weeks.

"We are having internal consultations. We are taking legal opinions. Issues are being resolved. Once issues are resolved, then I think bankability will be there," Department of Financial Services Secretary D K Mittal told reporters here.

He added that issues related to the matter "are likely to be resolved in a week or two ensuring the protection of capital."

Mittal said that some of the companies that would be bidding will be existing companies and if their balance sheets support, then banks would like to lend to them.

"But the question to me as banker (is that) whether my money is having enough security," he said.
Mittal said the Finance Ministry has proposed tripartite agreement to be executed with regard to auction of spectrum.

"We have taken inputs from the banks. SBI Capital Markets have done this work for us. Then this agreement has been sent to them (banks) about two months ago. There has been two or three meetings. We will have another one or two meetings then we will close this," he said.

The Telecom Department would offer the agreement to those who participate in the bids. This will be between the banks, Department of Telecom and the bidder, he added.

Telecom companies have been pushing the government to consider payment option in installments as suggested by telecom regulator TRAI as they consider base price of spectrum to be very high.

Telecom Regulatory Authority of India (TRAI) has recommended 10 times high minimum base price of spectrum for pan-India operations at around Rs 18,000 crore. This is around 10 times high than what companies paid in 2008 when A Raja was the telecom minister.

However, the inter-ministerial panel at DoT, the Telecom Commission, in its recommendation to the Empowered Group of Ministers on Telecom has decided against the option of staggered payments.


First Published: Tuesday, June 12, 2012 - 21:15
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