Telecom SOS: Cabinet may take call on telecom relief package today

Telecom SOS: Cabinet may take call on telecom relief package today

The reduction in the licence fee by two percentage points would provide a relief of around Rs 3,000 crore annually to the operators.The discount within the licence price by two proportion factors would supply a aid of round Rs 3,000 crore yearly to the operators.

The Union Cupboard is anticipated to take up the division of telecommunications’ (DoT’s) proposal for providing a aid package deal to the telecom trade at its assembly on Wednesday, official sources stated. Although financially-troubled Vodafone Idea (VIL) has been on the forefront of demanding a aid package deal, sources stated that it will not be tailored for any particular firm however can be for all the sector.

Nonetheless, any aid package deal at this level of time would profit VIL essentially the most. It will additionally defend authorities’s revenues and publicity of banks to the corporate. Of VIL’s web debt of Rs 1.8 lakh crore, authorities dues within the type of deferred spectrum cost (Rs 96,300 crore) and AGR dues (Rs 61,000 crore) come to round Rs 1.57 lakh crore.

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Although the precise parts of the proposed aid package deal isn’t recognized, the chances are high that it will comprise discount in licence charges, spectrum utilization prices, clearer definition of adjusted gross income and extension of moratorium on deferred spectrum installment by one other two years. Liberalisation of international direct funding norms from a safety angle and taking away the necessity of furnishing financial institution ensures may additionally be on the playing cards.

Accordingly, the package deal might cut back the income share licence price to six% of AGR of the operators from the present 8%. This can be completed by lowering the 5% common service obligation levy by two proportion factors. Because the Telecom Regulatory Authority of India (Trai) had given its suggestions to this impact in January 2015, there can be no must as soon as once more search the regulator’s views on the matter.

The discount within the licence price by two proportion factors would supply a aid of round Rs 3,000 crore yearly to the operators.

The second side which the proposed package deal might handle is the difficulty of AGR prospectively. The federal government can’t do something relating to the previous AGR dues because the Supreme Court docket has dominated on it and likewise prescribed the mode and tenure of cost, however going forward the federal government needs to settle the difficulty of calculation of AGR – what telecom revenues need to be a part of it and what revenues of operators’ will be stored out of it. Right here additionally the Trai has given suggestions prior to now, so there can be no must as soon as once more search its views.

The third side could also be taking away the financial institution ensures which the operators need to furnish to the DoT for his or her AGR and deferred spectrum installments. For financially wholesome operators, furnishing financial institution ensures isn’t an issue however for a financially troubled operator like Vodafone Thought, getting financial institution ensures at this level of time is an issue. The view within the authorities is that the availability for furnishing financial institution ensures will be completed away with.

The fourth part of the package deal might be extending the moratorium on deferred spectrum installments. The federal government had in November 2019 supplied a two-year moratorium on such funds – for FY21 and FY22 – which might be additional prolonged. Nevertheless, whether or not the extension can be for another yr or two remains to be not determined. The 2-year extension had given a money circulate aid of round Rs 42,000 crore to the operators.

The federal government in-principle feels that there needs to be at the least three non-public telecom gamers available in the market for wholesome competitors however no particular profit will probably be given to any explicit firm like Vodafone Thought. “We wish a wholesome, vibrant telecom sector and if some points have to be sorted out, the federal government will do this. However no desire will probably be given to any explicit firm,” stated an official.

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