3G winners to get easy overseas loans

The government on Monday loosened overseas borrowing rules to make it easier for mobile phone companies to finance payment of the fee for the upcoming auction of 3G wireless spectrum. The finance ministry said in a statement that successful bidders will be allowed to pay the fee in rupees and refinance it with a long-term overseas loan within 12 months. The government had earlier permitted telecom firms to tap external commercial borrowings (ECB) to pay for spectrum allocation. “This will enable telcos to raise funds for the forthcoming 3G auctions at an affordable rate. It will also provide them greater flexibility with regard to their financing options and the industry therefore welcomes it,” said TR Dua, officiating director general of the Cellular Operators Association of India, the industry body representing all GSM service providers in India. Successful bidders must pay 25% of the bid amount within five days of the close of the auction and the rest within 15 days. The statement said ECB norms have been relaxed considering the short window available between the date of application for the 3G auction and the date of payment by successful bidders. The government has fixed Rs 3,500 crore as the minimum bid price for all-India 3G spectrum, and the auction is expected to be completed before the end of March.

For Further: economictimes.indiatimes.com/news/news-by-industry/telecom/3G-winners-to-get-easy-overseas-loans/articleshow/5500912.cms