The Ministry of Finance has requested the Department of Telecommunications (DoT) to permit spectrum to be used as collateral while granting a loan to an operator. The Ministry has also said that lenders must be part of any consultation related to cancellation of mobile permits held by telecom companies.
This is in view 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.
If DoT accepts the Ministry of Finance?s proposal, it would mean that spectrum can be seized by banks in case of a default or cancellation of mobile permits.
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.
