INSUBCONTINENT EXCLUSIVE:
Shares in Bharti Airtel and Vodafone Idea ended 2.52% and 6.08% lower respectively on Thursday.
The
government on Wednesday cleared a proposal to give telecom operators the option to defer payment of spectrum-related installments for next
In an official statement, the Cabinet Committee on Economic Affairs said the move was aimed at easing the cash outflow of the telecom
service providers facing financial stress
Companies opting for the scheme would be allowed to defer spectrum dues for either or both of financial years 2020-21 and 2021-22, it said
India's telecom industry is struggling with lakhs of crores in debt, cut-throat competition and a Supreme Court ruling favoring the
telecom department have forced major telecom players to bear record quarterly losses
Here is your 10-point guide to this big story:The deferred amount will be spread equally in remaining installments to be paid
However, interest - as stipulated while auctioning the concerned spectrum - will be charged so that net present value (NPV) is
protected.This will give telecom companies until April 2022 to commence payment for those two years but make them bear interest.The
government said improved financial health of telecom operators will ensure quality services for the consumer, and give a fillip to both
employment and economic growth
The decision for deferring spectrum payment installments will be implemented within a fortnight, it added.Shares in Bharti Airtel, Vodafone
Idea and Reliance Industries - the parent company of Reliance Jio Infocomm - ended 2.52 per cent, 6.08 per cent and 0.63 per cent lower
option to defer spectrum payments is "not a big deal
AGR total waiver should be the biggest lifeline for telecom operators along with this."The Supreme Court last month ruled in favour of the
crore from telecom operators.That put at risk the operations of leading operators such as Vodafone Idea and Bharti Airtel, which have warned
Telecom providers in the country pay the Department of Telecommunications (DoT) 3-5 per cent of their AGR in spectrum usage charges and 8
per cent as licence fees.Companies have long argued that AGR should comprise just revenue accrued from core services, while the government
says it should include all revenue
In last month's ruling, the top court upheld the telecom department's definition of AGR.Aggressive pricing of high speed data by
Reliance Jio, which launched commercial operations in September 2016, has led to intense competition in the sector
upward revision in more than a decade and come about six weeks after Jio announced its decision to charge its customers 6 paise per minute
for making voice calls to other networks.Get Breaking news, live coverage, and Latest News from India and around the world on
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