The Department of Telecommunications is considering a recommendation made earlier by the industry to set up a specialised bank for the telecom sector. To begin with, the bank will have a corpus of about $30 billion that will be transferred from the Universal Service Obligation Fund (USOF).

“At the time when DoT was formulating the National Telecom Policy 2018, we had made a recommendation that the excess amount in the USOF be put in a specialised bank that lends specifically to the telecom industry,” Rajan S Mathews, Director-General of the Cellular Operators’ Association of India, told BusinessLine on the sidelines of the Mobile World Congress 2019, here.

“I think DoT has taken it up, and it’s very much in support of it. Now, it should be cleared by DoT’s finance department,” he added. Separately, DoT sources also confirmed the development.

SPV to be formed

The plan is to create a special purpose vehicle (SPV) and move all infrastructure assets such as fibre, spectrum and towers to it. The bank (SPV) thus created will lend at a rate that will be comparatively lower than what is being charged by other lenders.

“The idea is to fund the SPV that lends money to telecom companies. The infrastructure bank will provide loans — like an infrastructure provider-1 (IP1) bank — to SPVs setting up infrastructure,” said Mathews.

Telco partnerships

Telecom companies are looking at sharing infrastructure in an attempt to bring down rollout and operational cost, as well as time taken for it.

On Tuesday, Bharti Airtel Chairman Sunil Mittal said he had reached out to the company’s biggest rival, Vodafone Idea, for a possible partnership for an independent optical fibre company the former is setting up.

“This is a good move, because nobody is competing on the fibre front. If a company has excess capacity, then it’s wise to share it, which will lead to a win-win situation. A company has to sweat its assets,” Mathews said.

Spectrum requirements

Talking about the Indian telecom industry’s recommendations to the regulator to allocate sub-6 GHz spectrum for 5G rollout, Mathews said the spectrum is widely available.

“It’s a rapidly emerging ecosystem and handsets are available. However, now the bands are becoming less agnostic and will become multi-use and muli-technology compliant,” Mathews added.

The writer is in Barcelona to attend Mobile World Congress at the invitation of Qualcomm

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