Union Cabinet has cleared aid package deal for telecom sector, say sources

The Union Cabinet is learnt to have cleared a package deal for the telecom sector on Wednesday.
Though the main points of the aid to be provided to the debt-laden sector are usually not but recognized, sources within the telecom ministry stated that the aid could be for the sector and “not for a specific company”.
“There is no precedence of the government bailing out a private company as such. So that was out of question. There are both short- and long-term measures for the telecom sector which we have decided upon,” an official stated.
Among the assorted aid measures being deliberate, it’s doubtless that there might be a discount within the spectrum utilization prices (SUC) and licence charges.
Currently, telecom service suppliers pay round 3-5 per cent of adjusted gross income (AGR) as SUC, whereas they pay round 8 per cent of the AGR as licence payment.
Apart from these, the funds for spectrum purchases, which had been deferred for as much as two years (2020-21 and 2021-22) in 2019, are additionally more likely to be prolonged for as much as a most interval of 5 years. Meanwhile, the spectrum holding interval, which is presently 20 years, perhaps prolonged past that.
Among the three non-public gamers within the telecom sector, each Vodafone Idea (Vi) and Bharti Airtel have been looking for some type of aid for the sector from the federal government within the type of discount within the levies paid by telcos, particularly license payment and spectrum utilization prices, in addition to some waiver on the discount of the rates of interest for dues to be paid to the Department of Telecommunications (DoT).
The two corporations have sought these reliefs, particularly after the Supreme Court’s judgment on AGR, by which the apex court docket had stated that the definition of AGR put forth by the DoT was right, and that telcos must pay the dues of the previous 20 years.
Following the Supreme Court’s judgment on AGR, the previous non-executive Chairman and Director of Vi, Kumar Mangalam Birla, had stated that his firm must shut store if no aid was forthcoming from the federal government. Birla’s feedback had then come practically a fortnight after the worldwide Chief Executive Officer (CEO) of Vodafone Nick Read made related feedback.

Read had on November 12 that yr stated that future in India was uncertain and the corporate might be headed for liquidation if there was no aid from the cost of AGR dues. He had additionally stated that the worldwide arm wouldn’t commit any extra fairness for India because the nation successfully contributed zero worth to the corporate’s share value.
In June this yr, Birla had, in a letter to the central authorities, provided handy over his 27 per cent stake within the firm to any public sector, authorities, or home monetary entity or to some other agency that the federal government might imagine match, to maintain Vi going.
Earlier this month, Birla, together with Read, had additionally met telecom minister Ashwini Vaishnaw and mentioned the well being of the telecom sector.