Deccan Chronicle

Centre to set up panel for telcos

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With the finance of telecom firms deteriorat­ing, the Centre has set up an inter-ministeria­l group (IMG) to suggest measures to see that the companies don’t default in their payments.

A Committee of Secretarie­s (CoS) had discussed the issue relating to ‘Stress in balance sheet in select sector’ at its meeting on March 29.

Following the meeting, an IMG has been set up which will have representa­tives from telecom department, financial services, economic affairs and revenue department.

The IMG will examine systemic issues affecting viability and repayment capacity in the telecom sector and give recommenda­tions for resolution of stressed assets.

It will also suggest policy reforms and strategic interventi­ons for the telecom sector. The IMG will submit its recommenda­tions within three months.

According to the industry sources, banks are worried telcos will start defaulting on payments due to fall in revenues and high level of debt in the sector. They said the telecom sector debt is around `8 lakh crore and annual interest payment of telcos is around `78,000 crore.

The Centre’s annual collection­s from telcos could fall to `30,000 crore. This even as Centre is sitting on unsold spectrum worth around `6 lakh crore.

Appreciati­ng the Centre’s decision for setting up an inter-ministeria­l committee to look into the financial health of the sector, COAI urged the government to take concrete steps that will improve the situation.

COAI director general, Rajan S. Mathews also underlined the fact that the RBI recently issued advisory to all the banks to re-assess the debt bearing capability of the telecom sector. “The recent results announced by the telecom companies are not an indication of a healthy growth of the sector. Immediate policy-level interventi­ons are required to uplift the financial health of the sector and to ensure that we move in the right direction of pursuing our national goals,” he added.

THE PANEL will have representa­tives from telecom, financial services, economic affairs and revenue department

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