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DoT and DEA consider adding spectrum to harmonised list of infrastructure

DoT and DEA consider adding spectrum to harmonised list of infrastructure

By Press Trust of India | Updated: 7 April 2014 20:08 IST

To facilitate fundraising by telecom companies using spectrum as an asset, the Department of Telecom and the Department of Economic Affairs are examining if the airwaves can be included in the harmonised list of infrastructure.

"Prima facie, it appears that spectrum is qualifying infrastructure criteria. Therefore, spectrum may be added in the harmonised master list of infrastructure," an official source in DoT said.

The harmonised master list of infrastructure was approved by the Cabinet Committee on infrastructure in May, 2012 to facilitate a coordinated approach among agencies providing support to infrastructure.

Following this, the Reserve Bank of India included mobile services companies, fixed network infrastructure like optic fibre, cable networks, mobile towers in the infrastructure list for availing external commercial borrowings.

Telecom operators have been requesting the government to treat spectrum as part of harmonised list of infrastructure on the grounds that it is akin to optic fibre and other transmission networks.

In February, seven telecom companies - Bharti Airtel, Vodafone, Idea Cellular, Reliance Jio Infocomm, Uninor, Reliance Communications and Aircel - cumulatively purchased spectrum for about Rs 62,162 crore.

Most of these companies have announced that they would make payment in instalments. To address the problem of financing the spectrum cost, the government had allowed telecom companies to make 25-33 percent as upfront payment and rest of the payments in 10 yearly instalments after 2 years of moratorium.

DoT source said that telecom companies have expressed concerns on treatment of spectrum as intangible asset due to which banks don't accept it is as collateral to raise funds.

"Spectrum is a natural resource being allotted to telecom licence holders at a consideration for use of providing telecom service, sold/received in precise determinate amount for fixed or determinable amounts of money. Thus it escapes the definition of intangible asset in monetary nature," the source said.

DoT is also mulling writing a reference note to the Ministry of Finance for reconsidering reduction of spectrum from net worth at par with intangible assets by banks.

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Further reading: Aircel, Airtel, Bharti Airtel, Idea Cellular, Mobiles, Reliance Communications, Reliance Jio Infocomm, Spectrum, Spectrum Auction, Telecom, Uninor, Vodafone