TELECOM PROJECTS:  Distributingthe Dough

Assignability of Licence

In view of the fact that the tangible
assets and the intellectual property consisting of software are highly
depreciable and subject to rapid obsolescence, the security coverage is not
sufficient.

The perception of the term-lending
institution in accepting a project for financial assistance can be summarily
dealt with as under:

• The capability of the entrepreneur.

• Techno-economic feasibility giving
  an assurance that the project is implementable and the financial viability
  that adequate cash flow generation is possible to defray financial expenses
  and guaranteed debt service coverage.

• The security coverage backed by
  assets. The security coverage gives serious concern to the financial
  institution in the sense that if, at any time during the project cycle, the
  security is depreciated or becomes worthless, and the project is subject to
  overrun in terms of time, cost and performance parameters, the security
  issue assumes serious proportion. This situation gives rise to the need for
  entering into a tripartite agreement amongst the licensor, licencee and the
  assignee (the financial institution) within a pre-determined time. When this
  tripartite agreement is an instrument endowed with legal sanctity and is
  
  enforceable, it is just possible for the financial institution to decide for
  extending financial assistance to the project.

Interconnectivity

Interconnectivity has always been a
bone of contention between the private operators and the Department of Telecom
Services (DTS).

A model interconnect agreement should
be formulated and a suitable policy for provision of interconnectivity has to be
evolved, in order that the model agreement Mutatis Mutandis (meaning "with
necessary changes") may be drafted in respect of each project and
scrupulously observed by the concerned parties, lest there should be inordinate
delay in project implementation.

Interconnectivity amongst various
circle operators should also be allowed to improve the project viability of
every operator, for enhancing competition and better services for the users.

Time Frame for Implementation of Project

The licence agreement should specify a
time limit of 18 months for implementation of the project by the licencee/operator.
In order to ensure smooth implementation, it is exceedingly necessary and of
decisive importance that there should be a

joint committee of various ministries of Government of India, state governments,
departments, local self-government/authorities. This committee should meet
periodically in order to identify the problems and take expeditious remedial
actions. The joint committee’s interaction shall eliminate inordinate delays
or substitute inaction with positive action, for example, clearance from telecom
engineering centre, ministry of surface transport, ministry of environment &
forests.

PC Viswanathan