TTSL to seek debt restructuring; MTNL appeals for licence extension

26 Jun 2017

Indian mobile provider Tata Teleservices Limited (TTSL) has approached a lender consortium led by the State Bank of India (SBIT) to restructure its outstanding debt of INR320 billion (USD5 billion). The Economic Times cites unnamed sources as saying that the firm has sought an extended maturity of 20 years for repayments as well as a fresh loan of INR50 billion to meet its operational and CAPEX needs. The development follows on the heels of an agreement from the creditors of a similarly debt-laden rival, Reliance Communications (RCOM), which granted the cellco a standstill on its debts until the end of December. During that time period, RCOM will not have to service its loans and its borrowings will not accrue interest. The move is intended to provide the cellco time to complete several transactions already underway, that will allow it to substantially reduce its debt burden.

In a related development, state-owned full service provider Mahanagar Telephone Nigam Limited (MTNL) has requested that the government extend the validity of its mobile licences in Mumbai and Delhi for two additional years at no extra cost. The concessions are currently valid until April 2019, but the beleaguered provider argued that that date should be pushed back as the licence was unused for four years after its initial allocation. MTNL claims that the late start was due to litigation, and a two-and-half-year delay in allotting spectrum to the provider. Further, the firm notes that the geographical coverage of its mobile licence did not originally match that of its privately-owned competitors: ‘In case of Delhi and Mumbai service areas, the expiry date of the [cellular] licence along with administratively allotted spectrum may … be modified as 10 January 2021, that is 20 years from effective date of granting standard licence in terms of geographical coverage at par with the other telecom service providers to maintain a level playing field.’