New Delhi, Jan 25 (Inditop.com) Even as the process of auctioning radio frequency spectrum for third generation telecom hangs fire, India Monday eased its borrowing norms to enable a successful firm pay the initial fee in rupees before accessing the global markets.
The government’s guidelines requires a successful company to pay 25 percent of the bid amount within five days and the balance within 15 days of the closure of the auctions and the government felt this called for borrowing norms to be eased.
“Given the short window available between the date of application for auctions and the date of payment, bidders find it difficult to raise external commercial borrowings to meet the payment obligation for bidding,” an official statement said.
“As the amount involved will be huge and has to be raised within a limited period of time and payable directly to the government, it has now been decided that the fee for spectrum allocation may be met out of the rupee resources by successful bidders.”
But this rupee payment, the statement added, has to be refinanced through long-term external commercial borrowing under the approval route with following conditions:
– The amount must be raised within 12 months from the date of payment of the final instalment
– Dealers authorised by the central bank should monitor end-use of funds
– Domestic banks will not be permitted to provide any guarantee
– All other requirements such as eligibility of borrower, lender and maturity should be complied with.
The government was proposing to auction spectrum for third generation telephony Jan 14 but a ministerial panel is yet to resolve a key issue over the number of private players to be allowed, as available radio frequency spectrum for civilian use is limited.
Third generation telecom services allow much faster connectivity than what is available now, to enable applications like Internet TV, video-on-demand, audio-video calls and high-speed data exchange.
