DoT likely to set up a panel for telco financial relief package

The Department of Telecom­munications (DoT) may appoint an external consultant or set up a panel to finalise financial relief to the sector.
 
It is learnt that the department is likely to consult an external agency for the revival package that is expected to provide relief to the sector besides being a lifeline for Vodafone Idea.
 
At the time of bringing the revival package for state-owned Bharat Sanchar Nigam, the Centre had sought remarks from the likes of IIM Ahmedabad and Deloitte.
 
“Consultations with these bodies help us evaluate the options better,” an official told Business Standard.
 
The procedure to invite such comments is by seeking proposals from these organisations along with their respective reports on the subject. The ideas are then deliberated by the government.
 
Another option in front of the department is to set up an internal committee to evaluate the relief proposal.
 
“These choices are on the cards and since the Prime Minister’s Office is taking keen interest in the matter, something should be finalised soon,” the official added.
 
These developments come at a time when Vodafone Idea is battling for survival in the domestic market. The company is exploring every option to stay afloat in the cut-throat telecom market.
 
It has sought help from the telecom department, stating it would be unable to pay the instalment of Rs 8,292 crore due on April 9, 2022, owing to cash being used for payment of AGR (adjusted gross revenue) dues and inability of the operations to generate the required cash in a predatory pricing situation. In June, Vodafone Idea approached the government to seek a one-year moratorium on payment of spectrum instalment of over Rs 8,200 crore, due in April 2022.

Vi mentioned the challenges it was facing in terms of raising funds as investors have expressed unwillingness to put money in the company.
 
This is because they believe that unless there is a significant improvement in consumer tariffs, the health of the industry will not recover and they will incur a loss on their investment.
 
The company is undergoing stress, which can be gauged from the recent reshuffle at the top level.
 
On August 5, Kumar Mangalam Birla stepped down as non-executive chairman of the company after offering to give up his stake in the debt-ridden firm.
 
The new non-executive chairman is Himanshu Kapania, who has served on the global GSMA board for two years and was also chairman of the Cellular Operators Association of India (COAI).
 
Birla has even offered his stake to any government or domestic financial entity.
 
Birlas own around 27 per cent stake in the company while Vodafone Group Plc has over 44 per cent stake.
 
The telecom department may consider relaxing the timeline of payment of certain levies that companies owe to the government.
 
The licence fee is paid in four quarterly instalments, which the department may allow the companies to pay annually.
 
As far as relief in payment of its AGR dues is concerned, the department alone cannot take the decision and would require consultations with the law ministry.