Tel Comm defers decision on IMG proposals, to meet in 2 weeks

The Telecom Commission today put off a decision on measures to provide relief to the stressed industry as it sought more details on some of the suggestions, including deferred spectrum payment liability, from the inter-ministerial group, according to a senior official.
The IMG is expected to revert with details on the clarifications sought "at the earliest", and the Telecom Commission will meet again in two weeks on the inter- ministerial group's proposals aimed at tackling the financial stress in the sector.
The commission, the highest policy-making body in the telecom sector, met here today to consider all the proposals put forth by the IMG.

The official, who did not wish to be named, said the Telecom Commission (TC) has sought additional clarifications from the inter-ministerial group (IMG) on two of the major recommendations. These pertain to giving telcos more time to pay for the spectrum they had bought and switching from PLR based to MCLR based rate for penalty payments.
The TC was in-principle broadly agreeable to other suggestions of the IMG, including referring to Trai the issue of removal of 50 per cent spectrum cap within a particular radiowave band -- for mergers and acquisitions.
"On the issue of spectrum cap, it was decided that it will be referred to Trai. But it is not yet approved per se, as the proposals will get activated when the next Telecom Commission meeting takes place," the source said, adding that "holistic view" on the entire report will be taken in the next meeting once the clarifications sought, come in.

After the TC takes a call, the proposals will be placed before the Cabinet for approval as these entail changes in the spectrum auction document.

When contacted, mobile industry body COAI's Director- General Rajan Mathews said he was hopeful that the TC will consider some other "permanent fixes" such as cut in licence fee and spectrum usage charges.
"It is better not to hurry this up and to get it right," he told PTI.
The IMG -- tasked with finding a remedy to the financial difficulties of the telecom sector -- had recently recommended that the payments for spectrum be made in 16 instalments (16 years) as against the current practice of 10 years.

The IMG had also favoured a cut in interest rates on penalties by switching from PLR based to MCLR based rate, which could provide relief of about two percentage points in the current situation.
IMG, on August 31, had wrapped up over three months of deliberations that involved extensive dialogue with banks and telecom companies.
The Indian telecom industry, which is in the midst of an intense tariff war, owes a staggering Rs 4.6 lakh crore to various financial institutions and banks.
Over the past few months as IMG held its deliberations, new and old telecom operators continued to blame each other for the sector's financial difficulties.

Reliance Jio accused incumbent operators of milking the sector using borrowed money while older players -- Airtel, Vodafone and Idea -- blamed free voice and data offering by the Mukesh Ambani firm for bleeding the sector.
In fact, Vodafone Group CEO Vittorio Colao last month wrote to Telecom Minister Manoj Sinha, ruing what he said was "unchecked price competition with services offered below cost for considerable periods of time".
The Vodafone top honcho, in the letter dated August 22, had expressed hope that the IMG will recommend "a reduction in the interest rates for deferred spectrum payments to 6.25 per cent in line with the improved macroeconomic trends and an increase in the period of payment for spectrum".

Besides the IMG report, the TC considered various other proposals, including the telecom regulator's recommendations on free data, where it has decided to seek "clarifications" from Trai on how the entire scheme will be operationalised.
The commission has also approved a proposal pertaining to provision of mobile services to villages not yet covered by the communications network, which will be implemented by Bharti Airtel.
It has also given its nod to a proposal relating to implementation of second phase of the BharatNet project that has an outlay of Rs 18,792 crore. The source said it has been decided that in six states -- Andhra Pradesh, Jharkhand, Tamil Nadu, Gujarat, Maharashtra and Chhattisgarh -- the implementation of the project will be taken up by state-led agencies.

In three states -- Uttarakhand, Himachal Pradesh and Odisha -- the implementation will be done by the Power Grid Corporation of India.