Relief for telcos: Cabinet approves 2-year moratorium on spectrum payments

Relief to telecom companies: Cabinet nod for two-year moratorium on spectrum payments
A rickshaw puller speaks on his mobile phone as he waits for customers in front of advertisement billboards belonging to telecom companies in Kolkata. Photo: Reuters

New Delhi: In a major relief for debt-hit telcos, the Centre deferred spectrum auction payments due from the operators for the years 2020-21 and 2021-22 - in view of their financial stress. The move was approved by the Union Cabinet headed by Prime Minister Narendra Modi.

Finance Minister Nirmala Sitharaman said that as per the recommendations of the panel of secretaries, the deferral amounts will now be equally spread over the remaining instalments to be paid by telecom service providers (TSPs) without any increase in the existing time period specified for making the payments.

Sitharaman said that interest, as stipulated while auctioning the spectrum, will be charged so that the net present value (NPV) of the payable amount is protected.

TSPs opting for deferment will have to provide bank guarantee for the revised payable amount.

The move to defer payments for 2020-21 and 2021-22 will give Rs 42,000 crore relief to Bharti Airtel, Vodafone Idea and Reliance Jio, the PTI reported.

Earlier, Telecom Minister Ravi Shankar Prasad had said that there is no proposal before the government at present on waiver of penalties and interest on outstanding licence fee payments based on adjusted gross revenue (AGR).

"No such proposal is under consideration of the government as on date," Ravi Shankar Prasad said in a written reply to the Lok Sabha, reported news agency PTI.

The Indian telecom operators owe the government nearly Rs 1.47 lakh crore in license fee (LF) and spectrum usage charges (SUC). Of this, license fee amounts to Rs 92,642 crore as of July this year, while SUC stood at Rs 55,054 crore as of October end this year.

Ravi Shankar Prasad informed the House that Vodafone Idea has an outstanding dues of 53,038 crore, of which Rs 28,309 crore in LF and Rs 24,730 crore in SUC. Bharti Airtel dues are nearly Rs 35,586 crore (Rs 21,682 crore as LF and Rs 13,904 crore as SUC). The licence fee dues of Telenor and Tata Group of companies stood at Rs 1,950 crore and Rs 9,987 crore, respectively.

The Supreme Court had on October 24 upheld Department of Telecommunications' (DoT) demand that non-telecom revenues should be part of the annual Adjusted Gross Revenue (AGR). As a result, telcos had to pay Rs 92,642 crore to the government as statutory dues over the next three months.

(With PTI and IANS inputs)

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