Trai lets telcos mortgage spectrum

Trai has permitted companies to mortgage spectrum to raise funds from banks. Final decision will be by EGoM.

Written by Agencies | New Delhi | Published: June 21, 2012 5:48:16 pm

Telecom regulator Trai has permitted companies to mortgage spectrum to raise funds from banks and a final decision will be taken by the Empowered Group of Ministers (EGoM) which is meeting today,a government official said.

“Regulator (Trai) agreed that it (spectrum) can be a tangible security subject to certain conditions,” Department of Financial Services Secretary D K Mittal told reporters.

The Department of Telecom (DoT) had proposed that operators be allowed to mortgage spectrum in order to raise funds from banks.

The Reserve Bank and the Finance Ministry have already approved the proposal.

“The matter is coming before Empowered Group of Ministers (EGoM) today for final decision,” Mittal said.

He said the matter was referred to Telecom Regulatory Authority of India (Trai),whether spectrum can be treated as a tangible security.

Talking about the conditions,he said,there are three-four conditions which are not difficult to meet.

“These conditions are spectrum should be transferable and it should be freely assignable,” Mittal said.

Telecom companies have been pushing the government to consider payment option in instalments as suggested by telecom regulator Trai as they consider base price of spectrum to be very high.

Telecom Regulatory Authority of India (Trai) has recommended 10 times high minimum base price of spectrum for pan-India operations at around Rs 18,000 crore. This is around 10 times high than what companies paid in 2008 when A Raja was the telecom minister.

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