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India alters loan rules for 3G auction
26 January 2010
The Indian government says that winners of next month’s 3G auction will be able to refinance their licence fees with a long-term overseas loan within a year
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Comment: This will be welcome news to companies wanting to bid for 3G licences in India in February 2010 — a much-delayed auction. The rules state that winning operators will have to pay up quickly, but now they will then be able to sort out long-term finance internationally.
India has modified some external commercial borrowings rules to help arrange short-term funds for bidders for third generation telecom licences.
Successful bidders will be allowed to pay the fee in rupees and refinance it with a long-term overseas loan within a year, the finance ministry said. The funds have to be raised overseas within a year of paying the final instalment to the government.
Under the auction rules, the successful bidders will be required to pay 25% of the bid amount within five days of the close of the auction and the balance within 15 days of the auction closure.
The rules have been eased due to the short window available between the date of application for the 3G auction and the date of payment by successful bidders. The Indian government has fixed 35 billion rupees ($750 million) as the minimum bid price for all-India 3G spectrum. GTB