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

The Economic Times - - Companies: Pursuit Of Profit - Kalyan.Par­bat@ times­group.com

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

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