India may grant China-style funding to vendors

Dylan Bushell-Embling
24 Mar 2011

India is considering providing its local telecom vendors with financing support on par with that offered by China to companies including Huawei and ZTE.

The government is exploring ways to help local vendors compete with the Chinese majors, which can offer financing at as low as 3% interest due to their agreements with Chinese banks, India's Economic Timesreported.

Indian and Western vendors, by contrast, must often charge interest rates of between 12% and 14%.

The telecom ministry, DoT, is considering a range of options including grants and concessions for deals with local and Western vendors.

DoT expects the total spend on telecom infrastructure to reach up to 5 trillion rupees ($110 billion) over the years 2012-2017, with private operators responsible for four-fifths of this amount and state-owned companies contributing the remainder.

These spending projections include 2.8 trillion spent on rolling out greenfield 2G, 3G and 4G networks, and 1 trillion on new telecom towers.

Because of this, the DoT wants to ensure a level playing field for local vendors, and even for European incumbents, to compete against the Chinese players.

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