The Department of Telecommunication (DoT) has rejected the Ministry of Finance?s suggestion to allow banks to use the spectrum held by telecom operators as collateral while lending funds.
The Ministry of Finance had suggested this in light of the adverse impact the 3G spectrum issue has had on the sector, coupled with poor uptake of 3G services and mounting losses. As a result, over the past year, banks are apprehensive about lending to operators.
The DoT committee looking into the issue has stated that as per the licence agreement, resale of the spectrum by the lender is not allowed, if operators default on payments or their permits are terminated. Further, in the eventuality of lenders taking possession of the licence of the defaulting company, the airwaves held by the operator would revert to the government.
Currently, all spectrum is owned by the government and is given on a 20-year lease to operators, on the condition that it will be returned to the government.
