Telcos to get longer period to pay spectrum fee, interest lowered

In a move that comes as a relief for the Indian telecom companies, the apex telecom policymaking body on Friday approved telcos demand to extend duration for spectrum payments. The Telecom Commission also enabled lower interest rates on unpaid dues by at least two percentage points.

This is being done by replacing prime lending rate (PLR) with marginal cost of fund-based lending rate (MCLR) for calculating the interest paid by operators on delayed payment of licence fee and spectrum usage charge (SUC), said a person in the direct know of the matter.

The replacement of PLR into MCLR was part of the final report of the inter-ministerial group (IMG) on financial stress in the telecom sector. The group was set up in May to study the financial stress of the sector and suggest solutions. The IMG had earlier recommended that the deferred payment schedule for spectrum should be increased to 16 years from 10 years and replacement of the PLR with MCLR.

“The move certainly helps the industry as it will improve the cash flow... We are hoping the commission to address a lot of issues that are affecting sector such as spectrum usage charge and AGR,” Rajan Mathews, director general, Cellular Operators Association of India, said.

Mint on Friday reported that Telecom Commission was expected to offer interim, piecemeal sops to debt-laden telecom firms, pending a relief package that’s still some distance away. On some matters such as calculation of adjusted gross revenue in spectrum trading, the commission is expected to seek legal opinion from the law ministry, which will extend the process of a comprehensive package, Mint reported on Friday.