IMG to Discuss, Fi­nalise Re­port on Tele­com Sec­tor’s Health on Fri­day

Re­port ex­pected to pro­vide relief to tel­cos sad­dled with debt of .₹ 5 L crore

The Economic Times - - Companies: Pursuit Of Profit - Our Bureau

New Delhi: The in­ter-min­is­te­rial group con­sti­tuted to sug­gest mea­sures for eas­ing fi­nan­cial stress lev­els in the tele­com in­dus­try will meet on Fri­day to “discuss, fi­nalise and sign” its much-awaited re­port, said a top gov­ern­ment of­fi­cial.

The re­port is ex­pected to pro­vide some suc­cour to tel­cos col- lec­tively sad­dled with a whop­ping .₹ 5 lakh-crore of debt, with stretched bal­ance sheets and erod­ing in prof­its amid a rag­ing price war trig­gered by Re­liance Jio In­fo­comm.

ET had pre­vi­ously re­ported that the in­ter-min­is­te­rial panel is con­sid­er­ing op­tions, in­clud­ing nearly dou­bling the de­ferred pay­ment pe­riod for auc­tion spec­trum and cut­ting its in­ter­est bur­den.

Last week, tele­com min­is­ter Manoj Sinha had told Lok Sabha the min­is­te­rial group would sub­mit its re­port in 20 days, based on which the gov­ern­ment would take re­me­dial mea­sures. The panel had met rep­re­sen­ta­tives of all tele­com com­pani- es in batches in the run-up to sub­mit­ting its rec­om­men­da­tions to the Cen­tre. The gov­ern­ment had man­dated the panel to ex­am­ine sys­temic is­sues af­fect­ing the vi­a­bil­ity and re­pay­ment ca­pac­ity of the in­dus­try and sug­gest cor­rec­tive mea­sures. The in­ter- min­is­te­rial group will also look into pol­icy re­forms and strate­gic in­ter­ven­tions.

A one-time poster child of In­dia’s eco­nomic progress, the debt-laden sec­tor is bat­tling a bru­tal price war and un­sus­tain­able lev­els of fi­nan­cial stress. Even the Re­serve Bank of In­dia (RBI) had re­cently alerted banks to keep a close watch on tele­com sec­tor loans amid prof­itabil­ity ero­sion at phone com­pa­nies.

In fact, the sec­tor reg­u­la­tor has re­cently urged the tele­com de­part­ment to coax the fi­nance min­istry to re­duce the ap­pli­ca­ble goods & ser­vices tax (GST) from 18% to 5% by declar­ing the in­dus­try a core in­fra­struc­ture sec­tor.

FILE PHOTO

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