Telecom Commission to discuss relief measures for stressed telcos on Friday

Some relief is in the offing for telecom operators as the Telecom Commission (TC) will meet on Friday to consider the measures proposed by the inter-ministerial group for easing the financial stress in the sector.

The Commission, which is also the highest decision-making body of Department of Telecommunications (DoT), has already approved increasing the timeframe for deferred spectrum payments to 16 years as well as a change in calculating interest for delayed payments. In the meeting tomorrow, a decision will be taken regarding the spectrum caps.

The Telecom Regulatory Authority of India (Trai) has recommended raising the 25 per cent overall spectrum limit to 35 per cent, whereas the 50 per cent intra-band cap has been removed. In place of it, the regulator has proposed having a cap of 50 per cent on the combined spectrum holding in the sub-1 GHz bands (700, 800 and 900 MHz).

The move for relaxing caps will benefit operators such as Vodafone and Idea Cellular to retain their airwaves after the merger and also allow other telcos to get more spectrum in a particular band. The IMG had asked the DoT to seek Trai's views on spectrum caps and see if the limits should be relaxed or not.

After TC's approval, the financial measures for the telecom industry will be placed before the Cabinet by the end of this month.

The TC had also sought legal opinion regarding Adjusted Gross Revenue (AGR) applicable in case of receipts from spectrum trading and this will also be discussed in tomorrow's meeting.

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

With the entry of Reliance Jio last year, the industry has been locked in an intense tariff war. Incumbent operators have been flagging pressure on revenue and profitability, blaming the rock-bottom data tariffs and free offerings of Jio for deteriorating financial health of the sector.

To ease the financial stress, the Indian Banks' Association (IBA) has asked the government to allow telecom companies undergoing debt restructuring in schemes drawn up by the Reserve Bank of India to surrender liberalised spectrum. Any excess upfront payment associated with such spectrum should be refunded, it has argued.