Indian banks averse to telecom lending: Uninor

Last Updated: Thu, Sep 13, 2012 03:50 hrs

Mobile telecom services provider Uninor, a joint venture between Norwegian mobile operator Telenor and India’s real estate developer Unitech, on Wednesday said Indian banks were still reluctant to lend money to the telecom sector, thereby forcing them to go in for options such as external commercial borrowings (ECBs).

“We are holding discussions with the Union finance ministry and the Department of Telecom (DoT) to amend the ECB guidelines and enable us to raise funds for the upcoming spectrum auctions,” Sigve Brekke, managing director of Uninor, and executive vice-president and head (Asia operations), Telenor, told mediapersons here on Wednesday.

“We have asked some relaxation in the ECB norms. They have done it during the 3G auctions and we are asking not more than that. Some banks are seeking more regulatory clarity, while some have reached the maximum exposure limits to the telecom sector. We will have difficulty in funding the spectrum payment,” he said, adding that the company was requesting the Centre to lift the $750-million cap to raise funds via the ECB route.

Uninor is gearing up to participate in the fresh 2G auction, scheduled to be held in November. It operates in 21 circles, with the main business coming from nine circles.

The company has scaled down its operations in Tamil Nadu, Kerala, Karnataka and Orissa circles, while sharpening focus on the other nine circles in view of continuing uncertainty over the spectrum auction. It has around 46 million subscribers in the country.

On Telenor finalising a new Indian partner, Brekke reiterated that the company was not looking at an existing telecom player as its prospective partner and not a real estate company either.

He said that the process of splitting its three-year ties with Unitech before placing bids for the new spectrum in the upcoming government auction was still in progress. “We are getting closer ... things are moving towards a final solution,” he said.

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