MF Farooqui, secretary, Department of Telecommunications, has urged the Department of Economic Affairs (DEA) to approve a host of incentives which will help tower companies in taking advantage of the infrastructure status provided to the industry in 2012.
The telecom secretary has approached DEA to expedite the clearance process for allowing accelerated depreciation benefits and also pave way for concessional loans with longer term of 10 to 15 years to help tower companies roll-out infrastructure projects. Farooqui has also asked DEA to examine whether tower companies can avail of overseas borrowings to meet their working capital requirements and for repayment of rupee loans. At present, the Ministry of Finance only allows telecom companies to tap the external commercial borrowings route for spectrum payments and capex. It does not allow repayment of Indian debt through external commercial borrowings.
In addition, telecom secretary has also demanded the provision for viability gap funding (VGF) to telecom operators and tower companies to help them achieve green energy targets mandated by the government. According to Farooqui, VGF is available for long-gestation projects of national importance, and telecom companies must also be considered for VGF.
While seeking these benefits, Farooqui has stated that telecom is a capital-intensive sector and addressing these issues would step up investments and help improve telecom penetration in areas yet to be covered by telecom services.
