Telcos raise funds for buying 3G spectrum

Telecom companies, who have emerged winners in the just concluded 3G auction mobilised Rs360bn in loans of the total Rs677.19bn they will have to pay-up by the month end. Telcos have also lined up an additional Rs290bn from their cash reserves and a further Rs110bn in internal accruals to pay for the 3G airwaves. A third of the Rs360bn loans that have been raised by telcos are through the issue of commercial papers. Bharti Airtel has raised Rs85bn from a consortium of financial institutions. Vodafone Essar will pay for 3G airwaves from its Rs100bn loan from SBI. Reliance Communications has so far raised Rs40bn from selling commercial papers at 6% interest. Aircel Cellular has raised Rs40bn by issuing commercial papers at 6% interest for a one-year period. Tata Teleservices has raised close to Rs50bn to pay for 3G airwaves.