The government today said telecom companies that win in the upcoming 2G spectrum auction will be allowed to raise cheap loans from overseas markets in the form the external commercial borrowings, ECBs. A Finance Ministry
official told reporters in New Delhi that the successful bidders in the 2G auction would be
eligible to refinance their Rupee loans availed of from the domestic lenders for making the upfront payment with a long term ECB under the automatic route. The bidding for the airwaves is scheduled to start from November 12.
The telecom industry had been seeking further easing of the ECB norms as banks are reluctant to lend money to the sector. In order to develop the telecom sector, the government in January 2010 had provided a window of 12 months to successful
bidders of 2G auction for refinancing the rupee loan from domestic lenders to make payment for spectrum allocation with a long term ECB under the approval route. The official further said, keeping in view the large outlay of funds required to be paid directly to the government within a limited period of time, relaxation is provided for the upcoming 2G auction.