Telcos to get finance corporation for support

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SummaryFinancially-crippled telcos can expect financial support from the government as the Department of Telecommunications is set to finalise the creation of Telecom Finance Corporation before this fiscal-end

Financially-crippled telcos can expect financial support from the government as the Department of Telecommunications is set to finalise the creation of Telecom Finance Corporation before this fiscal-end.

The Telecom Finance Corporation will be established on the lines of the Power Finance Corporation to provide long-and short-term loans to telecom companies. According to estimates, the sector will require Rs 650,000 crore investments during the 12th Plan period and the private sector will have to contribute Rs 541,795 crore.

The other important thing on the agenda includes finalisation of guidelines on spectrum refarming and sharing issue, finalisation and approval of unified licence regime and implementation of nationwide mobile number portability.

The issue of refarming of spectrum will be difficult to implement due to resistance from telecom operators.

The EGoM has allowed incumbent GSM operators to keep 2.5Mhz of spectrum in the 900 Mhz band by paying an auction-determined price. According to the earlier order, operators had to refarm their network to the less-efficient 1,800 Mhz spectrum but the companies are opposing it.

The GSM industry led by the Cellular Operators Association of India is opposed to refarming. It says it would cost them at least Rs 1,00,000 crore to buy replacement airwaves through an auction and also build more mobile masts and replace some of the existing gears to continue the services.

Meanwhile, Trai chairman Rahul Khullar has hinted at a liberal policy regime in the future. “Now is the time that industries, which are on the downside, must look for opportunities in other sectors. The market should open itself to mergers and acquisitions and spectrum trading,” said Khullar.

DoT’s agenda

* Creation of Telecom Finance Corporation before this fiscal-end

* Finalisation of guidelines on spectrum refarming

* Finalisation and approval of unified licence regime

* Implement nationwide mobile number portability

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