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COAI urges govt to prioritise AGR issue, suggest relief in 60 days

With the telecom sector staring at a massive payout following a Supreme Court order, the government has constituted a Committee of Secretaries to work out a financial bailout package

Press Trust of India  |  New Delhi 

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Industry body on Tuesday urged the newly constituted panel of secretaries to prescribe immediate relief measures to address the AGR issue first, given the "urgency of situation".

Welcoming the formation of the Committee of Secretaries (CoS) under the Cabinet Secretary, Cellular Operators' Association of India (COAI) Director General Rajan Mathews told PTI that "given the urgency of the situation for the industry, we would request that the decision-making be bifurcated".

The immediate focus should be on suggesting a relief package to address the AGR issue, since the stipulated payment timeline is a mere three months, Mathews said.

"This is absolutely critical and needs to be addressed first...We would request that the suggestions be worked out within 60 days," Mathews said adding that the other aspect on long-term viability of the sector and financial stress could then deliberated on.

The industry is requesting the government for waiver of interest and penalty amounts, saying that penalties are only pursued where there is a wilful default and malafide intent which is not the case in the current matter. The industry will request the Government to go after only the original amount of AGR (Adjusted Gross Revenue) dues, sans the interest and penalty components.

Mathews said that will soon write to the government and also seek a meeting with the minister to discuss the issues in detail.

With the telecom sector staring at a massive payout following a Supreme Court order, the government has constituted a Committee of Secretaries to work out a financial bailout package that may include lowering of spectrum charges as well as ending the era of free mobile phone calls and dirt cheap data.

The Committee of Secretaries, headed by Cabinet Secretary Rajiv Gauba, has been asked to examine "all aspects" of "financial stress" faced by service providers such as and Vodafone-Idea Ltd and suggest measures to mitigate them, sources in the Department of Telecommunications (DoT) said.

The panel has been asked to look at the demands of telecom service providers (TSPs) for deferment of payments they had promised for the spectrum won through auction as well as consider lowering airwave usage charge. It has also been asked to consider lowering the obligation of TSPs for providing 5 per cent of their annual revenues for the Universal Service Obligation Fund, sources said.

In parallel, sector regulator Trai is expected to examine prescribing minimum charge for voice and data services, which according to old telecom operators will ensure long term viability and robust financial health of the sector, they said.

This is not the first time that the sector is talking about floor prices. Back in early 2017, then Idea Cellular had pushed for a floor price, to put an end to the free services that were being offered by new entrant Infocomm.

At that time, Telecom Regulatory Authority of India (Trai) had, however, rejected the floor price proposal after a detailed discussion with the industry, saying that fixing a floor price wasn't a workable idea, and that prices under forbearance should continue as they are.

Meanwhile, the CoS, which is expected to meet shortly and submit recommendations in a time-bound manner, will consider the demand of operators to defer spectrum auction payment for 2020-21 and 2021-22 in order to ease cash flow and lowering USOF charge to 3 per cent.

First Published: Tue, October 29 2019. 20:15 IST
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