Telcos' debt burden: IMG to address Cabinet by Dec-end, says Manoj Sinha

IMG recommended payments for spectrum be taken in 16 instalments (16 years) as against current practice of 10 years

The proposals mooted by an inter-ministerial group (IMG) to address the financial stress in the telecom sector are expected to be placed before the Cabinet by month-end, according to Telecom Minister Manoj Sinha.

The report of the high powered group -- whose suggestions included giving more time to telcos to pay for the spectrum they brought in auction and easier interest rate for penalties -- will first be taken up by the Telecom Commission at its meeting on December 21.

The telecom sector is reeling under a massive debt burden (Rs 4.6 lakh crore) and its profits too have come under pressure, as a result of a bruising price war intensified by the entry of newcomer Reliance Jio.

"The Telecom Commission is meeting on December 21. The decision has already been taken on some of the aspects...the rest will happen on December 21," Sinha said on the sidelines of Asean India connectivity summit organised by CII.

Asked about the timeframe for placing the recommendations before the Cabinet, the Minister said, "I hope that will happen by the month end".

The IMG — tasked with finding a remedy to mitigating the financial difficulties of the telecom sector — had recommended that the payments for spectrum be taken in 16 instalments (16 years) as against the current practice of 10 years.

It also favoured a cut in interest rates on penalties, a move that could provide relief of about two percentage points in the current situation.

The Telecom Commission — the highest policy-making body in the sector — had sought a legal opinion on some of the points before finalising its view.

On another significant issue - that of easing spectrum cap for telcos - the panel had approached Telecom Regulatory Authority of India (Trai) for its views.

The sector regulator, last month, recommended removal of ceiling on spectrum held by mobile operators within a particular band, while suggesting a 50 per cent cap on the combined radio wave holding in bands like 700 MHz, 800 MHz and 900 MHz.

If Trai's suggestions are accepted by the telecom department, they would provide a major relief for the soon-to -be-merged Idea Cellular and Vodafone, as they would have breached the spectrum caps in certain circles under the existing rules.

It would also enable aggressive newcomer Reliance Jio to pick up additional spectrum, if needed, in bands like 800 MHz.

Earlier, while speaking at the Asean India connectivity summit, Sinha said that augmenting digital linkages across the region would bolster efforts to improve the lives of people using Information and Communication Technologies (ICT).

"Connectivity plays the role of arteries for the economy. Seamless connectivity across nations enhances the efficiency of doing business which, in turn, leads to an overall growth of the region," Sinha added.