Telecom Regulation: Spectrum Mortgage

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3Q 2012 | IN-1013292


Spectrum Mortgage Recommended and Sanctioned in India



The Telecom Regulatory Authority of India (TRAI) recommended spectrum mortgage and the Reserve Bank of India (RBI) has sanctioned it. This essay explores some unexamined issues.


The Discussion So Far



The impact considered thus far has been limited to mobile carriers’ ability to raise capital. After the 2G spectrum scam*, financial institutions have ceased supplying funds to telcos; meanwhile, the proposed reserve price per megahertz of pan-India spectrum in the upcoming auction* is 10 times higher than what was paid in 2008. By allowing spectrum to be treated as a tangible asset, RBI permits operators to tap the valuable resource as collateral to secure credit.

*The scam saw govern...

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