Govt. to work on relief package for telcos

Industry stares at over ₹1.4 lakh-crore payout to exchequer

Published - October 29, 2019 10:11 pm IST - NEW DELHI

Data price at an average of ₹8 per GB is perhaps the lowest in world.

Data price at an average of ₹8 per GB is perhaps the lowest in world.

The government has constituted a Committee of Secretaries (CoS), headed by Cabinet Secretary Rajiv Gauba, to work out a relief package for the telecom sector, a move that may help mitigate the impact of the more than ₹1.4 lakh crore that the telcos may need to pay the exchequer following a recent Supreme Court order.

The CoS will “examine all aspects and suggest measures to mitigate the financial stress being faced by the telecom sector, keeping in view the larger public interest and improving telecom services for the subscribers,” a source in the Department of Telecom (DoT) said.

The source added that the CoS will review various demands made by the industry, including deferment of spectrum auction payment due for the next two years, reduction in spectrum usage charges and the Universal Service Obligation Fund levy.

“Representations have been received from major telecom service providers regarding the financial stress faced by them… the recent Supreme Court order is expected to further add to this,” the source said, adding that a case is also being made for viable pricing for voice and data, which falls in the realm of sectoral regulator TRAI, the source said.

TRAI is expected to examine prescribing a minimum charge for voice and data services to ensure long-term viability and robust financial health of the sector, the source added.

The panel, which will comprise secretaries to the Ministries of Finance, Law and Telecom, is expected to submit recommendations in a time-bound manner.

On Monday, Sunil Bharti Mittal of Bharti Airtel again met Telecom Minister Ravi Shankar Prasad and Telecom Secretary Anshu Prakash, while Kumar Mangalam Birla of Vodafone Idea had sought time to meet the officials.

₹4 lakh-crore debt

The industry’s debt currently stands at about ₹4 lakh crore. Last week, the Supreme Court upheld the government’s position on including revenue from non-telecommunication businesses in calculating the annual adjusted gross revenue (AGR) of telecom companies, a share of which is paid as licence and spectrum fee to the exchequer. Following the order, the telcos may have to pay the government ₹1.42 lakh crore within three months.

According to the DoT’s calculations, Bharti Airtel’s liability stands at about ₹42,000 crore while Vodafone Idea may have to shell out about ₹40,000 crore. Reliance Jio may have to pay about ₹13 crore.

Noting the gross revenue of the industry had fallen between 2017-18 and 2018-19, the source said the price of data for the customer at an average of ₹8 per GB is perhaps the lowest in the world. Additionally, the average revenue per user per month has declined from ₹174 in 2014-15 to ₹l13 in 2018-19. “The government is seized of the matter and will certainly facilitate an environment which continues to herald growth of the telecom sector,” the source said.

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