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Lenders led by SBI Capital Markets Ltd have written to the Telecom Regulatory Authority of India (TRAI) that they will file a review petition with the Supreme Court if the loans given to new 2G players are not secured.
SBI Capital has given a six-point action plan to the regulator, including allowing the operators to mortgage spectrum as collateral for the loan.
“Though classified as intangible, amount of spectrum is easily quantifiable and can be valued as well. Similar concessions have been provided by the RBI to the road sector in the past,” SBI Capital said in a submission to TRAI.
SBI Capital has also suggested that it should be allowed to take over the assets and infrastructure of the 2G operators whose licences have been cancelled by the Supreme Court. The apex court in February asked the Government to cancel 122 licences given in 2008. Those affected include Etisalat DB, Uninor, Sistema Shyam, Videocon, STel and Loop. This has made the banking sector very nervous as most of these companies had taken huge loans for investing in the business.
State Bank of India, for instance, has a total exposure of Rs 23,000 crore in the telecom segment, of which, Rs 15,000 crore is direct funding and the balance is non-fund based (guarantees, and so on).
While the Government is taking several steps to address the concerns of the telecom companies affected by the Supreme Court ruling, no one is talking about securing the loans extended by the banks. The Department of Telecom, in fact, is taking steps to cancel the licences and put the spectrum back in the market for an auction, without even consulting the banks.
SBI Capital has told TRAI that since licences and spectrum are being separated under the new telecom policy, usage rights should be transferred to the lenders in case of a default or violations by the operator.
“The usage right is used as collateral for a loan, analogous to taking out a mortgage on an apartment or securing a loan with pledged assets,” SBI Capital said. It added that similar requests have already been made to the RBI.
The lenders are also of the view that the successful bidders for the upcoming 2G spectrum auction should be liable to take up all the debt of the company whose licences are cancelled.
tkt@thehindu.co.in
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