Once the report is submitted by IMG, it will be placed before the Telecom Commission for its consideration, says Aruna Sundararajan
The inter-ministerial group (IMG) set up to look into financial stress being faced by telecom players will submit its report by this week.
Telecom Commission, the highest policy-making body of the department of telecommunications (DoT), will consider the report at its meeting on September 8 and take a final decision, DoT secretary Aruna Sundararajan said.
“I am sure the IMG is proposing some relief... We expect their report to be submitted today or tomorrow,” Sundararajan said.
Once the report is submitted by IMG, it will be placed before the Telecom Commission for its consideration, she said.
The IMG was constituted earlier this year to suggest ways to reduce financial stress in the telecom sector. As per industry estimates, total debt for the sector is at around Rs 4.5 lakh crore. Incumbents including Airtel, Vodafone and Idea have been facing pressure on their margins since the entry of a new player Reliance Jio in September last year with free voice calls and data offers.
IMG is learnt to have suggested extending the period for deferred spectrum payment and shifting from prime lending rate to the marginal cost of funds based lending rate for interest and penalty payments with regard to licence fee and spectrum usage charges. Currently, a portion of spectrum auction amount is taken as upfront payment by DoT and the balance after a two-year moratorium is paid out every year in 10 instalments. It is expected that telecom players could be given 16 years instead of 10 years for such deferred spectrum payment.
Vodafone Group CEO Vittorio Colao has recently written to the telecom minister Manoj Sinha expressing hope that IMG will recommend “a reduction in the interest rates for deferred spectrum payments to 6.25% in line with the improved macroeconomic trends and an increase in the period of payment for spectrum”.
IMG already had several rounds of discussions with the industry and banks.
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