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