Telcos likely to get more time to pay ₹42,000 cr in spectrum dues

Will improve cash flows for service providers: official

Updated - October 23, 2019 09:16 am IST

Published - October 23, 2019 01:41 am IST - NEW DELHI

The Centre is also planning to cut universal service obligation levy to 3%.

The Centre is also planning to cut universal service obligation levy to 3%.

To provide relief to the debt-ridden telecom sector, the Central government is considering a proposal to allow a two-year moratorium to telecom operators on pending spectrum payment, which will help telcos avoid an outflow of over ₹42,000 crore.

Additionally, the government is also mulling a reduction in universal service obligation levy to 3% from the present 5%.

“We are finalising some proposals to provide relief to the telecom sector. One proposal is allowing a two-year moratorium for spectrum auction deferred payment liabilities, to companies,” a senior government official told The Hindu .

The official added that this will help improve cash flows for the telecom service providers in the short to medium term, by avoiding immediate cash flows of over ₹42,000 for the next two financial years ie. 2020-21 and 2021-22.

However, this will not reduce the total payment as the companies will have to pay the deferred amount with applicable interest.

“Discussions are also on for reducing the USOF levy by 2% to 3%,” the official said. This reduction, however, is likely to come with some riders.

Both proposals have been a long standing demand of the telecom sector whose debt stands at about ₹7 lakh crore.

Last year in March, the Union Cabinet had approved a proposal giving telcos the option to extend the time period for payment of spectrum bought in auction to 16 years from 10 years. 

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