Mortgage spectrum to raise funds: EGoM

The Empowered Group of Ministers (EGoM) on telecom headed by Home Minister P Chidambaram on Thursday agreed to a proposal to allow telecommunication companies to mortgage spectrum to raise funds from banks to buy airwaves. In the event of a loan default, banks can auction the mortgaged spectrum under the supervision of the Department of Telecom, Telecom Minister Kapil Sibal told reporters here after the meeting.

The newly constituted EGoM, which held its first meeting for over three hours, decided to allow the telecom companies to mortgage the spectrum to raise funds as the banks have been wary of lending the telecom firms fearing default.

As the panel has to take some of the crucial decisions like fixing base price for auction, one-time fee for companies holding extra spectrum and network rollout obligations, the minister said the panel will meet again early next week.

Asked whether the EGoM would be able to decide on spectrum allocation and pricing before the Supreme Court’s August 31 deadline expires, Sibal said: “We are trying put things in place, trying as far as possible to meet the deadline.”

The panel decided to inform the apex court on the status of auction after finalising some parameters.  If the government failed to meet the deadline, it may ask the apex court to extend the August 31 deadline. “We are moving as quickly as we can and we want to go to Supreme Court to demonstrate to them that as far as we are concerned we are ready with everything,”Sibal said.

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