IMG proposes to conduct spectrum auction next financial year

The inter-ministerial group (IMG), which has proposed various measures to address the financial stress in the telecom sector, has recommended conducting the spectrum auction in next financial year.

Telecom Regulatory Authority of India (Trai) has come out with a consultation paper seeking comments from stakeholders on auction of nine spectrum bands, including airwaves that can be used for 5G services.

However, given the financial stress of telcos, the IMG felt it would not be prudent to conduct the auction in this fiscal, a source in Department of Telecommunications (DoT) said.

According to sources, the panel has recommended extending the deferred payment schedule to 16 years and converting the PLR (prime lending rate) to the MCLR (marginal cost of funds-based lending rate) as the primary relief measures for financially stressed telcos.

On the issue of interconnect usage charges and removal of 50 per cent spectrum cap - within a particular band - for mergers and acquisitions, the panel has suggested that the issues should be addressed by Trai.

The panel has not recommended any cut in license fee or spectrum usage charges (SUC).

The report will be discussed by Telecom Commission in its meeting scheduled for September 8 after which the Cabinet will take a final call on the matter.

The IMG - comprising senior officials from ministries of finance and communications - was constituted in mid-May to "examine systemic issues affecting viability and repayment capacity in the telecom sector and furnish recommendations for resolution of stressed assets".

The outstanding debt in the industry is pegged at Rs 4.5 lakh crore, incurred mainly on account of payments for spectrum, and other levies.