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India : DoTready to classifyspectrumatangible asset.

The telecom department has decided to the finance ministry's views of classifying bandwidth as a tangible asset that can be pledged as collateral for raising finances, offering another much required avenue for stressed telcos to raise debt to refinance existing loans or meet operational expenses.

Bandwidth has been considered an intangible asset by public and private sector banks who have been wary of accepting it as collateral all these years, instead using telecom license.

They, along with telecom operators, however have been demanding that spectrum should be categorized as a tangible asset which could then be pledged, considering that the scarce natural resource is the most valuable asset that a telco has.

"Prima facie, it appears that spectrum is qualifying infrastructure criteria. Therefore, spectrum may be added in the harmonised master list of infrastructure," an official in the license and finance wing has said.

"Bringing in the concept of trading of spectrum as a marketable commodity has changed of spectrum towards being treated at par with tangible assets in matter of accounting treatment," the note added.

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Publication:Mena Report
Geographic Code:9INDI
Date:Apr 8, 2014
Words:189
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