Secretaries panel to look at telecom financial stress

New Delhi, Oct 29: The government has constituted a committee of secretaries to explore a financial bailout package for the telecom sector by lowering spectrum charges as well as ending the era of free mobile phone calls and dirt cheap data as companies look at the government for avoiding payment of thousands of crores of rupees in overdue statutory levies.

The Committee of Secretaries, headed by Cabinet Secretary Rajiv Gauba, has been asked to examine "all aspects" of "financial stress" faced by service providers such as Bharti Airtel and Vodafone-Idea and suggest measures to mitigate them, sources in the Department of Telecom-munications (DoT) said.

The panel, which will comprise secretaries to the ministries of finance, law, and telecom, has been asked to look at the demands of telecom service providers (TSPs) for deferment of payments they had promised for the spectrum won through auction as well as consider lowering airwave usage charge.

It has also been asked to consider lowering the obligation of TSPs for providing 5 per cent of their annual revenues for the Universal Service Obligation Fund (USOF), they said.

In parallel, sector regulator Trai is expected to examine prescribing minimum charge for voice and data services, which according to old telecom operators will ensure longterm viability and robust financial health of the sector, they said.

The panel was set up a day after an unsigned paper seeking a waiver of interest and penalties on the unpaid amount, as well as staggering payment of principal licence fee over 10 years was submitted to the DoT. Bharti Airtel Chairman Sunil Bharti

Mittal and his brother Rajan Mittal had also met Telecom Minister Ravi Shankar Prasad and Telecom Secretary Anshu Prakash on Monday. Citing the recent Supreme Court ruling that had upheld the government's position on including revenue from non-telecommunication businesses in calculating the annual gross revenue of telecom companies, a share of which is paid as licence and spectrum fee to the exchequer, the note sought a two-year moratorium on spectrum payments beyond April 2020 till March 2022, reduction in licence fee from 8 per cent to 3 per cent, and cutting USOF to 1 per cent. Industry body COAI immediately

welcomed the constitution of the CoS, saying the panel must work out a relief package within 60 days.

The CoS, which is expected to meet shortly and submit recommendations in a time-bound manner, will consider the demand of TSPs to defer spectrum auction payment for 202021 and 2021-22 in order to ease cash flow and lowering USOF charge to 3 per cent, sources said.

While older TSPs such as Bharti Airtel and Vodafone-Idea have been talking of financial stress. the matter has assumed greater importance after the October 24 judgement of the Supreme Court.

—PTI