DoT submits IMG report on financial stress in sector to Cabinet

By: | Published: February 8, 2018 5:53 AM

The government-appointed panel had concluded that the industry is facing an interim liquidity stress. It recommended the extension of deferred payment period for spectrum bought in auctions from the current 10 years to 16 years.

The department of telecommunications (DoT) has sent the report by a inter-ministerial group (IMG), which was formed to suggest measures to help cash-strapped telecom operators, to the Union Cabinet for approval.

The department of telecommunications (DoT) has sent the report by a inter-ministerial group (IMG), which was formed to suggest measures to help cash-strapped telecom operators, to the Union Cabinet for approval. “The IMG report on financial stress in the telecom sector has been sent to the Cabinet for approval,” telecom secretary Aruna Sundararajan told reporters on Wednesday. The government-appointed panel had concluded that the industry is facing an interim liquidity stress. It recommended the extension of deferred payment period for spectrum bought in auctions from the current 10 years to 16 years. Besides, the panel had also suggested replacing PLR with MCLR for the delay in payments by operators on licence fee and spectrum usage charges etc. The IMG had also taken up the issue of liberalising the 50% spectrum circle-wise cap. The Telecom Commission had approved the IMG’s recommendations on deferred spectrum payment and replacement of PLR with MCLR, while referring the issue of spectrum cap to Trai. Trai recommended the removal of intra-band cap of 50% spectrum-holding by operators in a circle. It suggested that operators should now be allowed to hold 35% of the total spectrum assigned in a circle against the current cap of 25%.

Since all these recommendations require change in contract terms, they need to be approved by the Union Cabinet. According to industry body IBA, the total liabilities of the telecom companies stands at around Rs 7.75 lakh crore as on March 31, 2017, of which bank borrowings and liabilities for spectrum-related payment to DoT alone amounts to Rs 5.80 lakh crore. Sunadararajan said that the final draft of new National Telecom Policy (NTP 2018) will be ready by April. “We are definitely in favour of light regulation. We believe in inter-operable equipment and technology. In two-three weeks we will be able to table NTP and then start getting suggestion from public comments,” she added.

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