ThegovernmentonWednesdaydoledoutaRs42,000crorerelieftodebt-ladentelecomcompaniesafteritagreednottotakeanypaymentsforspectrumtheyuseforthenexttwoyears.
TheUnionCabinetheadedbyPrimeMinisterNarendraModiapprovedgivingBhartiAirtel,VodafoneIdeaLtdandRelianceJioanoptiontoavailofatwo-yearmoratoriumonpaymentstheyweresupposedtomakeinyearlyinstallmentsforthespectrumboughtinauctions,FinanceMinisterNirmalaSitharamansaidhere.
WhilethemovewillgiveRs42,000crorerelieftoBhartiAirtel,VodafoneIdeaandRelianceJio,thegovernmentisunlikelytointerveneintheSupremeCourt-mandatedstatutorypayments,topsourcessaid.
OnOctober24,theSupremeCourtorderedtelcostopayasmuchasRs1.4lakhcroreinpaststatutoryduesafterconsideringnon-telecomrevenuesfortheircalculation.
Whilethetelcosareseekingwaiverofinterestandpenaltiesontheduesandextendedpaymenttimelinesinsteadofthreemonthsmandatedbytheapexcourt,sourcessaidthematterwaspurelyalegalissueandanyextensionorcalibrationcanonlybedoneonlyunderthedirectionofthecourt.
Sitharamansaidthepaymentsforspectrumwoninauctionhasbeendeferredfor2020-21and2021-22.Itwillnowbeequallydividedovertherestofthepaymenttermandthetelcoswillhavetopayinterestonitaswellasbackthemwithbankguarantees.
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Ineffect,thebenefitaccruingtoBhartiAirtelwillbeaboutRs11,746crore,VodafoneIdeaRs23,920croreandRelianceJioRs6,670crore.
"InviewofthecurrentfinancialstresswhichisfacedbymajortelecomserviceprovidersandpursuanttorecommendationgivenbyCommitteeofSecretaries,CabinethasapprovedtodeferreceiptofthespectrumauctioninstalmentduefromtheTSPs(TelecomServiceProviders)fortheyears2020-21and2021-22,"shesaid.
DefermentofspectrumauctioninstalmentswilleasethecashoutflowofthestressedTSPsandfacilitatepaymentofstatutoryliabilitiesandinterestonbankloans.
"ContinuedoperationbyTSPswillgiveafilliptoemploymentandeconomicgrowth.ImprovedfinancialhealthofTSPswillfacilitatemaintenanceofqualityofservicestoconsumer,"anofficialstatementsaid.
Welcomingthedecision,CellularOperatorsAssociationofIndia(COAI)DirectorGeneralRajanMathewshopedthegovernmentwilltakefavourableviewonotherdemandsoftheindustrythatincludewaiverandinterestandpenaltiesonthestatutoryduesmandatedfortheSupremeCourtandextendedtimelinesformakingthepayments.
Thedecisionfordeferringspectrumpaymentinstalmentsfortwoyearswillbeimplementedwithinafortnight,thestatementsaid,addingthatanamendmenttothetelecomlicenseshallbeissuedexpeditiouslytoimplementtheCabinetdecision.
"Interestasstipulatedwhileauctioningoftheconcernedspectrumwill,however,bechargedsothatNPV(NetPresentValue)ofthepayableamountisprotected.TheNPVwillremainintact.
"Asperthecurrentpolicy,thetelecomserviceproviderswillcontinuetosecuritisethenextpayableannualinstalmentbyafinancialbankguarenteeofanamountequivalenttotheinstalment,"Sitharamansaid.
Sourcessaidthetelcoswillnothavetomakeanypaymentfor2020-21and2021-22.
SourcespointedoutthatthebenefittothethreelargetelecomcompanieswillbetotheextentofRs42,000crore,anobligationthatnowstandsdeferredbytwoyears.
Thegovernmenthasalsoaskedoperatorstomakecombinedeffortstorelievethestress,andtheoperatorsareexpectedtoholdameetinginthisregardin2-3days.Itispertinenttomentionherethatallthetelecomoperatorshaveannouncedplanstoincreasetariffsinthecomingweeks.
Sourcessaidthegovernmentwillnottolerateanymonopolybyanyoperator.
Theyalsoquestionedwhyoperatorswhoknewtheirpastliabilitiesdidnotmakecontingencyprovisionsinthebooksofaccountsforamatterthathasbeenpendingsince2011inapexcourt.
"Surely,thismostelementaryaccountingprocedurewasnotunknowntothem,"oneofthesourcessaid.
Ontheoperators'demandforwaiverofpenaltyandinterestdues,thesourcesaidthatanyreliefhastocomefromthecourt.
Thegovernment'spositiononcomputationofstatutorydueshasbeenupheldintoto,andasthingsstandtodayoperatorshavetopayAGR,penalty,andinterest,thesourceadded.
BhartiAirtel,VodafoneIdeaandothertelecomoperatorsarestaringatRs1.4lakhcroreinoutstandingstatutoryduesfollowingaSupremeCourtorderonOctober24thatsentshockwavesthroughanindustryalreadygrapplingwithbillionsofdollarsindebtandanintensetariffwar.
Thetopcourtupheldthegovernment'spositiononincludingrevenuefromnon-telecommunicationsbusinessesincalculatingtheannualAdjustedGrossRevenue(AGR)oftelecomcompanies,ashareofwhichispaidaslicenceandspectrumfeestotheexchequer.
TelecomcompaniesowethegovernmentRs92,642croreinunpaidlicencefee,andanotherRs55,054croreinoutstandingSpectrumUsageCharge(SUC).
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