Debt-hit Telcos may Seek Fiscal Relief to Boost Cash Flow
Saddled with a debt of 4.74 L cr, cos seek relief on airwave & licence fee payments
Kolkata: Mobile phone operators in the debt-laden telecom sector are likely to push for fiscal relief measures to boost cash flows, three people aware of the matter told ET. Among their key demands, phone companies cutting across GSM and CDMA technology platforms are likely to seek an easing in spectrum payment norms coupled with 90-day deadline extension for licence fee and spectrum usage charge payouts to reduce financial stress , they said. The telecom sector has over .₹ 4.74 lakh crore debt.
Mobile phone operators are likely to seek an overall reduction in regulatory costs and a tweaking of SUC payout rules, by suggesting such payments be allowed at the end of a quarter based on actual revenue instead of at the start of a period based on estimated revenues.
Mobile operators are likely to urge the govt to coax banks to extend long-term loans with 20-year tenures and explore ways to restructure the existing loans, the persons cited earlier said.
Telecom operators, it is learnt, are likely to write to the govern- ment seeking an extension in spectrum payment tenures from 10 to 18 years, which would enable a mobile carrier to spread out its airwaves-related payments over the 20-year tenure of a licence, including the two-year moratorium. “If approved, this would significantly reduce annual spectrum liabilities and bosost cash flows, which would enable a telco to invest more in data networks and customer experience, which it is unable to do now,” a senior executive of a leading telecom company told ET.
Indications are that the Cellular Operators Association of India and Association of Unified Telecom Service Providers of India are likely to write separate letters to the telecom department.
COAI’s director general Rajan Mathews and Auspi secretary general Ashok Sud could not be reached for comments till the time of going to press. The telecom industry’s push for urgent fiscal relief comes at a time when net debt levels of top companies have skyrocketed in the aftermath of heavy data spectrum purchases over the last 3 years, and capex investments.
Soon after Budget, COAI’s Mathews said that mobile phone companies were disappointed that the financial health of the telecom industry was not addressed.
Cos may seek an overall reduction in regulatory costs and a tweaking of SUC payout rules