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Telcos May Face Funding Blues; Interest Burden, Cash Drain Make Domestic Lenders Jittery

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As telecom operators bid aggressively to retain existing airwaves and total bids crossed Rs 1.03 lakh crore on Monday, leading domestic lenders are getting worried, expressing reservations about their ability to disburse loans to the sector.

“We will be extremely cautious about lending to the sector,” said Arundhati Bhattacharya, chairperson of State Bank of India.

“We’ll go on a case-by-case basis and will be very selective. We will closely watch the leverage position of all telcos.” SBI has lent more than Rs 40,000 crore to the sector. Telcos are bidding heavily to retain airwaves and protect revenue rather than adding to it, making the funding case weaker, said Rajiv Lall, chairman of Infrastructure Development Finance Corp (IDFC). Original post at ET Telecom

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Wahengbam Rorrkychand

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