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No need for big policy intervention in telecom, growth signs visible: IMG

Big policy intervention may not be required as green shoots are now visible in the industry: IMG

Press Trust of India  |  New Delhi 

inter-ministerial group IMG for telecom
If approved such proposed relaxation will improve the cash flow of telecom companies

Large scale intervention may not be required for as "green shoots" have become visible in the sector during the first quarter, according to a source in the on

At the same time, the group is considering certain measures, including increasing period of deferred to 16 years, a proposal that could bring some relief to the industry.

The - constituted to look into the in the sector and give its recommendations - met here today to discuss the issues.

The sources said the next meeting could be held on August 16 and there is a possibility that the report may be signed on August 17.

The recommendation of the group will be placed before the commission and ultimately to the

Emerging from the one-hour meeting, the source who participated in the meeting said that the general thinking in the is that big bang intervention may not be required given the "green shoots" that are now visible in the industry.

However, the source said that a final decision on the matter has not been taken and further discussions will be required.

"We have the demands of the industry on the table but what is required or not required is the question," the official said.

As of now, the proposals that are being considered by the include giving companies more time to pay for the spectrum they bought.

If approved such proposed relaxation will improve the of companies.

Currently, a portion of spectrum auction amount is taken as upfront payment by Department of (DoT) and the balance after a two-year moratorium is paid out every year in 10 instalments. The telcos may be given 16 years instead of 10 years for such deferred spectrum payment, another member of said.

The other proposals being discussed include convergence between DoT guidelines and guidelines on the issue of allowing spectrum as a collateral.

Another proposal being considered is shifting from PLR to MCLR for interest and penalty payments.

The inter-ministerial group, in June, had held extensive consultation with all players and large banks on the industry's financial difficulties.

Large operators have been flagging pressure on profitability and revenue, and have blamed competition intensified by the entry of newcomer for their woes. The industry has a debt of Rs 4.6 lakh crore and has been seeking sops to overcome the crisis.

First Published: Fri, August 11 2017. 14:05 IST