Band-aid solution: Telecom sector needs more sustainable measures

The IMG, set up last year to address the telecom crisis, stayed away from suggesting any big reform while recommending steps around spectrum payment and a cap on air waves

The Cabinet decision to extend the timeline for payment of spectrum acquired through previous auctions to 16 years from the current 10, as suggested by the inter-ministerial group (IMG), will reduce the stress in the telecom industry by improving the cash flow — perhaps by as much as Rs 550 billion. Along with a longer payment duration, the government has also approved a recommendation by the Telecom Regulatory Authority of India (Trai) to raise the overall spectrum holding of an operator to 35 per cent from 25 per cent, a step that will encourage consolidation. The 50 per cent spectrum