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Let telcos undergoing debt restructuring surrender spectrum: IBA to DoT

Excess upfront payment for airwaves should also be refunded

Kiran Rathee  |  New Delhi 

The IBA said most of the operators undergoing restructuring had borrowed from public sector banks

The (IBA) has asked the government to allow telecom undergoing restructuring in schemes drawn up by the Reserve Bank of India to surrender liberalised Any excess upfront payment associated with such should be refunded, it has argued.

In a letter dated November 29 to Aruna Sundararajan, secretary, department of telecommunications (DoT), the IBA has also sought speeding up of the process for announcing relief measures for telecom It was becoming difficult for to survive and service their without immediate support from the government, the IBA added.

Debts of the amounted to Rs 7.75 lakh crore in March 2017, of which bank borrowings and liabilities towards payments to the DoT were Rs 5.8 lakh crore.

Some of the are undergoing financial restructuring under various schemes. As part of restructuring, have proposed optimising their assets and monetising non-core assets, including their existing portfolio of

Tripartite agreements have been signed among banks, the DoT and with banks securing charge of spectrum, either through assignment of licences or by negative lien. “The government is requested to allow the that are undergoing restructuring to surrender liberalised /auction-acquired spectrum,” the letter said.

The IBA said most of the operators undergoing restructuring had borrowed from public sector banks. It urged the government to refund any excess upfront payment for the residual being surrendered and cancel all future deferred payment liabilities associated with such

“This money will be used for repaying the banks. We understand the government had allowed a similar facility to and in the past,” the letter added.

The IBA has also requested a return of bank guarantees submitted by to the DoT in respect of such This would  help free up working capital for these operators, it pointed out.

In 2016-17, the had for the first time posted a decline in revenue and operating profit. The adjusted gross revenue of the declined to Rs 39,777.55 crore in April-June from Rs 53,383.55 crore in the same quarter of 2016-17.

The crisis has forced the to approach the government for support to overcome the situation. The firms argued the reduced revenue was not sufficient to meet existing obligations and deferred payments for

and have already defaulted on their repayment obligations. An inter-ministerial group set up to address financial stress in the has recommended relief measures. These have been approved by the Telecom Commission, the highest decision-making body of the DoT. The proposals will go to the Cabinet for approval.

Among the relief measures, the government will increase the timeframe for deferred payments to 16 years from the current 10 years as well as change the calculation of interest for delayed payments.

First Published: Thu, December 07 2017. 01:59 IST