Telecom Commission Allows Spectrum Payment, Interest Relief For Operators
Telecom Commission approves IMG’s suggestions to provide relief to operators.
The Telecom Commission approved an inter-ministerial group’s suggestions to allow operators a longer tenure to repay spectrum costs and an easier interest rate regime to tackle financial stress, an official from the Department of Telecommunications told Bloombergquint.
The commission agreed to increase the period of deferred spectrum liability payment to 16 years from 10, the official said requesting anonymity. This would improve the cash flow of telecom companies. It also allowed a switch from the prime lending rate to the marginal cost of funds based lending rate plus 4 percent, which could help save interest costs, the official said.
These recommendations will now be sent to the Cabinet for final approval.
The inter-ministerial group that made the suggestions was set up to find measures to check stress in the telecom sector after the Reserve Bank of India flagged worries about lenders to the sector. The group met representatives of telecom operators, banks and other stakeholders before finalising its report.
Among the other issues, the commission referred the spectrum cap matter to the Telecom Regulatory Authority of India. It has sought the opinion of the law ministry on the issue of adjusted gross revenue from spectrum trading, the official quoted above said.
The Commission also approved the broad principles of the National Telecom Policy, the official said. The draft policy is expected to come for its approval by November 30 and a cabinet note is expected in January next year. The is expected to come into effect from March.