Telecom lobby seeks tax-free bonds, access to cheaper debt

New Delhi: The Cellular Operators Association of India (COAI) has sought incentives such as an option to issue tax free bonds as well as creation of a separate financing body which would provide cheaper loans to telecom operators as they battle shrinking revenue streams in the midst of a heated tariff war in the sector.

The telco lobby group has also sought for access to long term, low cost debt for infrastructure projects to be provided by Infrastructure Debt Funds, according to a presentation made by COAI to the department of telecommunications ahead of the budget. Mint has seen a copy of the presentation.

Infrastructure Debt Funds are investment vehicles which can be sponsored by commercial banks and NBFCs in India in which domestic/offshore institutional investors such as insurance and pension funds can invest through units and bonds issued by the IDFs. These funds essentially act as vehicles for refinancing existing debt of infrastructure companies.