Cabinet likely to take up relief package for the telecom sector in March

The Cabinet is likely to decide next month on the relief package for the telecom sector, based on the recommendations of an inter-ministerial group, including giving more time to telecom operators to make payment for spectrum and increasing the holding limit of radio waves.

"The Cabinet is likely to take up the issue of IMG recommendations in March," an official source told PTI.

The DoT's apex decision-making body, the Telecom Commission, has cleared some of the key recommendations made by IMG formed to chalk out relief measures for the debt-ridden sector.

The sector's debt is estimated to be around Rs 4.6 trillion and decline in the margins of telecom companies due to stiff competition in the market is said to have pushed it to financial stress.

The Commission had approved an extension of time period for the payment of spectrum bought in auctions by operators to 16 years from the current 10 years.

It had also approved the IMG recommendation to lower the interest rate on penalties paid by telecom operators by about 2 per cent.

Last month, the panel concurred with sectoral regulator Trai's suggestion to raise spectrum holding limit of mobile operators which will ease the exit route for those under stress.

The Telecom Regulatory Authority of India (Trai) had recommended last month that the ceiling on spectrum held by mobile operators within a particular band should be removed. It suggested a 50 per cent cap on the combined radio wave holding in efficient bands like 700 MHz, 800 MHz and 900 MHz.

Trai had also suggested that the overall cap on holding spectrum should be raised from the current 25 per cent to 35 per cent.

As per the current rules, no mobile service provider can hold more than 25 per cent spectrum, vital for transmitting signals, in an area and more than 50 per cent in a frequency band.

If these suggestions are accepted by the Department of Telecom (DoT), they would provide a major relief for the soon-to-be-merged Idea Cellular and Vodafone, as they would have breached the spectrum cap in certain locations under the existing rules.

It would also enable aggressive newcomer Reliance Jio to pick up additional spectrum, if needed, in bands like 800 MHz.