Mukesh Ranjan
Tribune News service
New Delhi, September 15
The Centre today approved the much-awaited relief package for the stressed telecom sector that includes a four-year moratorium on payment of dues by telecom companies and allowing 100 per cent foreign direct investment (FDI) under the automatic route.
Incidentally, the government announced the package six weeks after Kumar Mangalam Birla resigned from the post of chairman of Vodafone Idea Limited, which was created following the merger of British telecom giant Vodafone’s India unit and Birla’s Idea Cellular Ltd. The company has to pay around Rs 50,399.63 crore as statutory dues based on AGR (adjusted gross revenue) over the past several years.
The relief package will include a moratorium on payments for airwaves and is aimed at helping telecom service providers (TSPs) like Bharti Airtel, Reliance Jio and Vodafone Idea, industry sources said. They said as per the announcement, the companies would also have the option to convert interest on spectrum dues of the four-year moratorium period into government equity.
Last year, the Supreme Court passed a ruling asking Bharti Airtel and Vodafone Idea to clear government dues, which hit the sector hard and even banks led by the SBI had called on the government to give Vodafone Idea more time to clear its tax dues.
Along with the relief package, the government has also approved a number of structural and process reforms in the sector. “These are expected to protect and generate employment opportunities, promote healthy competition, protect interests of consumers, infuse liquidity, encourage investment and reduce regulatory burden on the TSPs,” the minister said.
Among these changes, there are nine structural and five process reforms and the AGR definition had been rationalised to exclude non-telecom revenues, the minister said.
To encourage investment, he said, 100 per cent FDI under automatic route had been permitted, besides rationalising spectrum user charges. “In future auctions, tenure of the spectrum will be increased to 30 years from 20 currently. Auction calendar has been fixed. The spectrum auctions will be normally held in the last quarter of every financial year. The tower set-up process will now be simplified on the basis of self-approval,” Vaishnaw said.
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