COAI says DoT may use USOF funds for a $30 bn telecom infra bank: report
01 March 2019
The Department of Telecommunications (DoT) is considering a recommendation made earlier by the industry to set up a specialised bank for the telecom sector. The bank will have an initial corpus of about $30 billion, transferred from the Universal Service Obligation Fund (USOF), the Cellular Operators’ Association of India (COAI) has suggested. .
“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,” reports quoting Rajan S Mathews, director-general of the Cellular Operators’ Association of India, said.
Speaking on the sidelines of the Mobile World Congress 2019, here, Mathews said, “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.”
DoT sources also confirmed its plan 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.
Telecom companies are increasingly looking at sharing infrastructure so as to bring down rollout and operational cost, as well as to reduce time.
On Tuesday, Bharti Airtel chairman Sunil Mittal said he had reached out to rival Vodafone Idea for a possible partnership for an independent optical fibre company.