Mobile carriers cleared to borrow from abroad

MUMBAI/NEW DELHI Fri Nov 9, 2012 8:41pm IST

Air India air hostesses sit outside the domestic airport in New Delhi May 25, 2010. REUTERS/Adnan Abidi/Files

Air India air hostesses sit outside the domestic airport in New Delhi May 25, 2010.

Credit: Reuters/Adnan Abidi/Files

Related Topics

MUMBAI/NEW DELHI (Reuters) - Indian mobile telecoms carriers can raise loans from abroad to refinance local debt, the government said on Friday, helping them to join the bidding process for airwave spectrum.

India is due to start an auction of second-generation (2G) mobile phone airwaves on Monday through an auction after a court ruled that a sale in 2008 was flawed and should be cancelled.

The base price for the forthcoming auction has been set at more than seven times what carriers paid four years ago, raising concerns among executives about how their companies can pay for the airwaves.

Bidders in the 2G auction can now tap short-term foreign currency loans to pay for spectrum bought in the sale and later replace them with longer-term external commercial borrowing.

The government will also remove some of the restrictions that prevent these telecoms businesses from raising loans from their parent companies, a circular from the finance ministry said.

India closely controls how companies can raise money abroad through commercial borrowing, with a complex set of regulations across industries.

The ceiling for external commercial borrowings is currently $750 million per company.

Telecoms executives have called on the government to allow them to tap funds from abroad, given that banks have been reluctant to lend to the sector.

(Reporting by Archana Narayanan and Manoj Kumar; Editing by David Goodman)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Drug Pricing

REUTERS SHOWCASE

 G20 Meet

G20 Meet

As G20 chases growth goal, members differ on how to get there   Full Article 

Modi Speaks

Modi Speaks

PM Modi says al Qaeda will fail in India - CNN.  Full Article 

Alibaba Listing

Alibaba Listing

Alibaba surges on massive demand in trading debut  Full Article 

Importing Rice

Importing Rice

Top rice exporter India importing over 100,000 T on temporary supply squeeze.  Full Article 

GSK Fined

GSK Fined

China hands drugmaker GSK record $489 mln fine, sentences executives.  Full Article 

HMT in Demand

HMT in Demand

Fans rush to HMT as watchmaker marks time.  Full Article 

Apple Not Cool?

Apple Not Cool?

Some consumers say Apple is losing its "cool" factor  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage