The Ministry of Finance, at the request of the Department of Telecommunications (DoT) is mulling a slew of grants and concessions to help operators ink low-cost vendor financing deals with non-Chinese telecom gear makers, say news reports.
It is believed that the government’s aim is to create a level-playing field between Western suppliers and Chinese players because the latter offers vendor financing at 3 per cent, owing to multi-billion dollar credit lines from Chinese banks. On the other hand, equipment from Western vendors carry interest rates of anywhere between 12 and 14 per cent.
DoT, in an internal note, pegs the total investment in telecom infrastructure at Rs 5 trillion during the 12th Plan period, starting April 2012. Of this, telecom public sector undertakings are expected to pump in Rs 1 trillion, while private players are slated to inject Rs 4 trillion.
The department’s internal note adds that the total number of telecom subscribers is projected to grow to 1,200 million during the 12th Plan from the present 780 million, and 25 per cent of these would be subscribers of 3G or 4G services, requiring investments to the tune of Rs 5 trillion. Of this, about Rs 2.85 trillion will be invested in rolling out greenfield 2G, 3G, 4G and Wi-Max networks, Rs 1 trillion in setting up an extra 200,000-odd telecom towers across the country, while the total investment in the pan-India broadband rollout will be Rs 750 billion and another Rs 400 billion will be invested augmenting the transmission network.
