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CoS panel formed for telecom bailout has been disbanded: Report

When asked if a new inter-ministerial panel would be constituted to address the issue, a government source said no.

November 26, 2019 / 01:52 PM IST

In a renewed blow to telecom service providers (TSPs), the Committee of Secretaries (CoS) constituted to work out the bailout package for the sector has been disbanded, the Economic Times reported, quoting sources in the government.

When asked if a new inter-ministerial panel would be constituted to address the issue, the source said no, adding that it was a Supreme Court-defined matter.

Moneycontrol could not independently verify the report.

In October, the CoS headed by Cabinet Secretary Rajiv Gauba was tasked with formulating a resolution on pending Adjusted Gross Revenue (AGR) dues and penalties, besides new spectrum and license fee payments as telcos felt burdened by the towering amounts.

The panel - which included secretaries of the department of telecom, law, corporate affairs, revenue and economic affairs and the NITI Aayog CEO - was asked to issue demand notices seeking Rs 1.4 lakh crore in past dues.


It was also been asked to consider lowering the obligation of TSPs for providing 5 per cent of their annual revenues for the Universal Service Obligation Fund (USOF).

On November 20, Finance Minister Nirmala Sitharaman announced that the Cabinet had approved deferring receipts due from TSPs for spectrum payment for a period of two years, and the years of deferment of payments would be spectrum auctions for years 2020 to 2021 and 2021 to 2022.

In October, the Supreme Court upheld the definition of AGR calculation as stipulated by the Department of Telecommunications (DoT). This means that telecom companies will have to pay up as much as Rs 92,642 crore to the government, more than half of which is owed by Airtel and Vodafone.

Terming the issues raised by telcos with respect to AGR as ‘frivolous’, the SC further held that not only the original charges but the principal interest and penalties on delayed payments would also be payable.

The apex court said that all revenues accruing to telecom operators will constitute AGR. It added that the revenues gained from termination fees and roaming charges would also be included in AGR.

AGR is the usage and licensing fee that telecom operators are charged by the DoT. It is divided into spectrum usage charges and licensing fees, pegged between 3-5 percent and 8 percent respectively.

As per DoT, the charges are calculated based on all revenues earned by a telco – including non-telecom related sources such as deposit interests and asset sales. Telcos, on their part, insist that AGR should comprise only the revenues generated from telecom services.
Moneycontrol News
first published: Nov 26, 2019 01:52 pm

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