In the recently concluded meeting between the Finance Ministry and Telecommunications Department, inter-ministerial group (IMG) is said to have discussed relaxing spectrum payments for telcos.
In the recently concluded meeting between the Finance Ministry and Telecommunications Department, inter-ministerial group (IMG) is said to have discussed relaxing spectrum payments for telcos. The deferred payment period for spectrum is likely to be extended to 16 years (earlier 10 years), reveal sources to Financial Express. There could also be some relief on the interest front as telcos will likely to levied an MCLR of 8 percent as against the current prime lending rate of 12 percent, reports the newspapers.
These relief measures, if they come about, are expected to ease cash flow pressures for the telecommunications sector. The current norm is that if telecos have paid between 25 and 50 percent of the bid amount (as per their spectrum band), they will get a two-year moratorium. After the two-year period, the operators will have to pay the balance in 10 instalments within a decade.
The other demands which were pitched in by the operators are said to have been rejected. All the telcos asked for a reduction in licence fee, spectrum usage charge (SUC) and reducing the 18 percent GST rate.
The telecos opted for the licence fee to be cut to around 1 percent of their adjusted gross revenue against the current 8 percent. On SUC, they wanted it to fall by 2 percent, making it 1 percent.
Mobile termination rates will be as per TRAI's (Telecom Regulatory Authority of India) decision. TRAI is currently reviewing the 14 paise per minute charges. Bharti Airtel and others want this to be hiked to 30-35 paise per minute whereas Jio (owned by Reliance Industries) is opting for a bill and keep (Net Payment Zero).
The telecoms have a Rs 4.60 lakh crore debt.
(Disclosure : Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.)