Committee on bailout package for Airtel, Vodafone, other telcos disbanded

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Published: November 26, 2019 4:11:33 AM

The government feels that it should not interfere in the Supreme Court verdict and let the companies seek relief from the top court.

airtel, vodafoneThe moratorium will be for two years beginning April 2020 but the interest, as stipulated in airwave auctions, will continue to be paid.

A committee of secretaries, which was constituted to look at measures for revival of the telecom sector, has been dismantled as the Cabinet has announced a moratorium of two years for spectrum payments. As per sources, the purpose of the panel was to suggest relief measures for the telecom sector and with Cabinet deciding that operators won’t have to pay deferred spectrum payments until March 2022, the purpose has been achieved.

The committee under Cabinet secretary Rajiv Gauba was last month constituted to examine “all aspects” of “financial stress” faced by service providers such as Bharti Airtel and Vodafone Idea and suggest measures to mitigate them. The panel was formed after the Supreme Court upheld the DoT’s position in calculating adjusted gross revenue (AGR), a share of which is paid as licence and spectrum fee to the exchequer.

The panel, sources said, held several meetings to discuss the extent of help the government could offer and made its recommendations to the government earlier this month.

Acting on its recommendations, the Cabinet on November 20 deferred for two years the spectrum payment dues from telecom companies to help an industry ravaged by a years-long price war, mounting debt and the Supreme Court decision last month demanding Rs 1.4 lakh crore in overdue fees.

The moratorium will be for two years beginning April 2020 but the interest, as stipulated in airwave auctions, will continue to be paid.

The government feels that it should not interfere in the Supreme Court verdict and let the companies seek relief from the top court. While the telcos are seeking a waiver of interest and penalties on the dues and extended payment timelines instead of three months mandated by the apex court, sources said the matter was purely a legal issue and any extension or calibration can only be done only under the direction of the court.

It was, however, not clear if there could be any relaxation in license fees and spectrum usage charges in future also.

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