Economy

16-year term for spectrum pay

16-year term for spectrum pay”

The Telecom Commission has approved the extension of time period for the payment of spectrum bought in auctions by telcos to 16 years from the existing 10 years. This is being done by replacing the prime lending rate (PLR) with marginal cost of fund-based lending rate (MCLR) to calculate the interest owed by telecom operators for delayed payment of licence fee and spectrum usage charges, said a person with direct knowledge of the matter.

Official sources said that the TC made a decision to go ahead with key recommendations of the inter-ministerial group (IMG) that had been formed to give suggestions on providing relief to stressed telecom companies. The telecom industry's total debt stands at around Rs 4.60 lakh crore.

The cabinet will next vet these approvals, officials said.

Laying the groundwork for the ambitious new National Telecom Policy (NTP), the Telecom Commission, has defined the guiding principles for the policy, which include focus on the telecommunications sector as an enabler of economic growth, protection of consumer interest by ensuring affordability, quality of services, protection of data and privacy, a senior official at the Department of Telecommunications (DoT) said.

The replacement of PLR with MCLR was also recommended by the IMG to ease the financial stress of telecom firms. Since the entry of a new player Reliance Jio, the indutry's revenues has been on a declining trend with margins dipping and tariffs coming to a new low where voice calls are free and data is being offered at dirt cheap rates.

"Telecom Commission has approved IMG recommendation to extend spectrum payment period to 16 years from 10 years at present".

The commission also approved the installation of 2,817 mobile towers in the North East by BSNL with an outlay of about Rs 2,258 crore.

The IMG also okayed TRAI's recommendation to mandate that every building plan should have duct for telecom cable and the completion certificate be given only if it has been incorporated.

The highest decision making body of the sector, has sent one of the recommendations of relaxing cap on spectrum in a band to the Telecom Regulatory Authority of India (Trai) for their views.

The inter-ministerial panel has given nod to grant Rs 1,231 crore to the Telangana government for the roll-out of the second phase of Bharat Net project in the state along with its drinking water project Mission Bhagiratha.

Commenting on the developments, Rajan S. Mathews, Director General, Cellular Operators' Association of India (COAI) told IANS: "We appreciate the government for addressing our concerns".

"The move certainly helps the industry as it will improve the cash flow in the near term. It will ease the payment burden". Analysts say that the delayed payments will give "some reprieve" to the troubled telcos, though adding that "a significant relief would have been a reduction in the licence fee and/or the spectrum usage charge (SUC) that companies have to pay to the government".



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