The Department of Telecommunications (DoT) is planning to ask the Ministry of Finance to permit the country?s tower companies to avail of external commercial borrowings (ECBs) on par with other infrastructure sectors, say news reports.
According to an internal DoT note on this subject, ?There is merit in the request that the existing government and Reserve Bank of India guidelines for ECB in the telecom sector are extended to infrastructure service providers as well. In view of the large investment estimated for the sector for the 12th Five-Year Plan, there is a strong case for putting in place institutional arrangements to make finance available for the sector as a whole.?
The note also refers to a presentation made by the Tower and Infrastructure Providers Association (TAIPA) in May, 2011.
TAIPA had requested that ECB facilities be extended to tower companies for the repayment and early payment of rupee-related project or term loans, mergers and acquisitions (M&As) of domestic tower and infrastructure companies, and for guarantees by foreign banks in availing financial assistance from domestic lenders.
The main hurdle, according to tower company representatives, is that the business does not have an infrastructure sector status and, therefore, does not come under the ECB regulations of the government as do roads, ports and power.
