DoT plan for international corporations: Easing funding, spectrum bid norms

The subsequent set of reforms for the telecom sector, set to be introduced earlier than the quarter ends in June, is more likely to additional ease the norm on permitting international corporations to start out telecom providers in India. This might be over and above the 100 per cent international direct funding (FDI) allowed by means of the automated route, sources in know of the event stated.

One of the main adjustments, an official stated, might be permitting these international corporations to come back and begin operations in India with out them needing to tie up with an Indian firm to bid for and retain spectrum purchased in auctions.

“The (telecom) ministry is of the considered view that the current situation of only three private telecom companies, of which one is ailing under debt, is not sustainable in the long run for the health of the sector. The norms will be eased so that foreign companies can either set up shop in India or invest more in domestic firms. The relevant rules will of course have to be followed,” stated the official, asking to not be named.

The determination might be part of the following set of reforms for the telecom sector and can observe the primary a part of reforms introduced in September 2021. The Department of Telecommunications (DoT) is presently engaged on the ultimate elements of the following set of telecom reforms, one other official stated.

“The target is to get more players in the domestic market so that there is competitive bidding for precious national resource such as spectrum,” the official added.

The DoT, nonetheless, might not go for additional discount in licence and different statutory charges, one of many officers stated, including that the variety of telecom customers in India is excess of most different geographies and therefore a reduce doesn’t make a lot “economic sense”.

The official added, “Right now, we have about 700 million internet users in India, and that is set to double in within the next five years. Spectrum is a national resource and it must be used judiciously to ensure optimal revenue for the government.”

Last September, the Union Cabinet had permitted a set of 9 structural and procedural reforms to deal with the short-term liquidity wants in addition to long-term problems with telecom corporations.

Among the steps introduced then, one of many main reforms was to offer a four-year moratorium on cost of all dues arising because of the Supreme Court’s September 1, 2020, judgment on adjusted gross income (AGR).

A moratorium of 4 years on cost of spectrum bought in previous auctions, barring the 4G spectrum public sale of 2021, had additionally been provided to the telcos.

Of the three personal telecom gamers, Vodafone Idea and Bharti Airtel had opted for the four-year moratorium, whereas Reliance Jio Infocomm had refused the choice.