Sumary of Cabinet may consider relief package for telecom on Wed:
- NEW DELHI: The Union Cabinet may consider on Wednesday a moratorium on payment of spectrum dues by telecom firms as part of a package for the sector aimed at giving relief to companies such as Vodafone Idea that have to pay thousands of crores of rupees in unprovisioned past statutory dues.
- The relief package under consideration includes telecom firms getting an option to convert interest on spectrum dues of the four-year moratorium period into government equity, three sources with the knowledge of the development said.
- VIL, which was created from the merger of British telecom giant Vodafone’s India unit and Birla’s Idea Cellular Ltd, has to pay about Rs 50,399.63 crore in statutory dues dating back over past many years.
- Overall, the telecom relief package is likely to outline reforms for the sector by way of granting moratorium on unpaid dues, redefining AGR (Adjusted Gross Revenue) prospectively and cutting Spectrum Usage Charges, a source said.
- Among the measures being discussed are a four-year moratorium on payments, AGR and spectrum, redefinition of AGR to exclude non-telecom items, and a cut in SUC, sources said, adding that these concrete measures are expected to ease the cash flow issues being faced by some players in the industry.
- Industry analysts too have been sounding an alarm over the risks of the Indian telecom market turning into a duopoly.
- Apex association COAI recently made a strong pitch for cut in levies, doubling tenure of auctioned radiowave holdings, along with 7-10 year moratorium for spectrum payments, to address viability concerns of the sector.