The department of telecommunications (DoT) is set to issue a global tender to invite interested entities for setting up a Telecom Finance Corporation (TFC).
According to government sources, the proposed TFC will be registered as a non-banking and non-deposit infrastructure finance company.The government has set a deadline of March 31, 2017 by when the TFC is expected to be fully functional. The Telecom Finance Corporation would be a public sector unit under the administrative control of DoT.
Last year, the government had proposed to set up TFC in the 12th Five Year Plan period (2012-17). The Cabinet had approved the creation of TFC under the National Telecom Policy 2012 in the year 2013. However, it was cleared last year after amending and inserting rules on funding, legal and regulatory issues.
A proposal for TFC was initially drawn out by the now defunct Planning Commission in 2013 based on the National Telecom Policy 2012 that had suggested constituting of TFC for easy funding of the telecom sector.
Banks and other lending agencies have generally shied away from funding the debt ridden telecom sector in India especially after the 2G scam.
According to government estimates, debt market in telecom sector during the 12th plan period would be around Rs 7.55 lakh crore and TFC will initially target 5% of this debt.