This comes soon after all three private telecom operators announced they were raising mobile phone tariff.
The
debt-ridden telecom industry, looking for financial relief from the
government, has got a two-year moratorium in making payments for past
spectrum auctions.
The
Union Cabinet on Wednesday decided to defer spectrum payments dues of
the telcos for 2020-21 and 2021-22, a move that will offer an
estimated Rs 42,000-crore overall relief to Bharti
Airtel, Vodafone Idea and Reliance Jio over the next two years.
While Vodafone Idea has got the maximum relief of more than Rs 24,500
crore, Airtel and Jio’s moratorium is pegged at around Rs 11,000
crore and Rs 6,800 crore, respectively. The Cabinet decision is based
on a recommendation by a committee of secretaries headed by Cabinet
Secretary Rajiv Gauba.
This
comes soon after all three private telecom operators announced they
were raising mobile phone tariff. Sources said the government had
asked telecom firms to set their house in order by raising tariffs
before seeking relief. Setting a tariff floor was the other option.
The recent Supreme Court order, asking telcos to pay AGR dues of
around Rs 1.33 trillion, only pushed Bharti Airtel and Vodafone
Idea to say the liabilities would make it tough for them to
continue as going concerns. After the Cabinet meeting, Finance
Minister Nirmala Sitharaman told the media in a late-night briefing
that the deferred amount will be spread out equally over the
remaining installments.
However,
she clarified that the existing time period specified for making the
payments wouldn’t be extended. Also, the interest, as specified at
the time of auctioning, would be charged so that the net present
value (NPV) of the payable amount is retained.
The
telecom firms opting for a two-year moratorium would need to provide
a guarantee of the revised annual installment payable for 2022-23.
Thanking Telecom Minister Ravi Shankar Prasad and the Department of
Telecom (DoT) for supporting the industry and pushing the industry
request to the FM, Cellular Operators Association of India director
general Rajan S Mathews said, “this will certainly provide some
immediate cash flow relief to the industry”.
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