Indian telcos are allowed to borrow from foreign banks to fund next week’s 2G airwave auction, the government announced today.
The Reserve Bank of India will issue a formal notification on this within a week, according to a government statement quoted…
Indian telcos are allowed to borrow from foreign banks to fund next week’s 2G airwave auction, the government announced today.
The Reserve Bank of India will issue a formal notification on this within a week, according to a government statement quoted by Reuters.
There are limits on how much foreign debt funding each sector can use and this increase for the telecoms sector is an encouraging step, according to a telecoms analyst at an Indian brokerage.
“It’s a positive as the cost of debt abroad is a little lower,” he told TelecomFinance. “Furthermore, Indian banks are not keen to lend to telcos because of the regulatory tangles the industry has experienced this year.
“I think global banks would be far happier to lend the money as they have a better understanding of the telecoms industry.”
The analyst added that he thought the more established operators may have been able to secure some local debt funding but the smaller ones would have struggled.
TelecomFinance reported yesterday that an Indian government cabinet has approved a plan to levy a surcharge on airwaves held by established operators such as Bharti Airtel, a move which should net the government at least US$5.7bn.
