Telecom operators have appealed the government to fix the floor tariffs rate by April 1. Also, telecom operators have asked the government to allow a three-year moratorium which would be followed by 15-year payment schedule for AGR dues along with the abolishment of bank guarantees as significant steps which would help the telecom sector to recover from the massive debt burden. According to the letter which was sent by Director General of Cellular operations of India Rajan Mathews to Telecom secretary Anshu Prakash “ Banks are not willing to take a risk in the current situation and are currently requesting telecom operators to reduce their exposures by refusing to issue new bank guarantees or even renew the older bank guarantees.”
Briefly, COAI’s letter appealed that bank guarantees must be abolished to secure license fees payments. In case if it is needed, the amount should be reduced to one-quarter of license fees compared with two quarters now.
Vodafone Idea Appeals DoT to not Invoke Bank Guarantees
Bank Guarantees has been in the limelight as the cash crunch telco Vodafone Idea has appealed the department of telecommunications (DoT) not to invoke bank guarantees as it might lead to fall of the telco giant. So far, Vodafone Idea has only paid Rs 3,500 crore out of its massive Rs 57,000 crore AGR dues. However, the telco giant has self-assessed their AGR dues at Rs 23,000 crore out of which Rs 7,000 crore is the principal amount. The official letter of COAI was sent a day before the meeting of Digital Communications Commission which was scheduled on February 27 to discuss relief measures for stressed telcos. However, the meeting was postponed on February 28.
Vodafone Idea Seeks Tax Refund
In the official letter, COAI has urged the government to set-off goods and service tax credits worth Rs 40,000 crores against AGR dues. Also, Vodafone Idea has appealed to DoT, Niti Ayog and government officials to allow it pay their AGR dues over 15 years after a three-year moratorium. The industry also said that soft loans must be offered at an interest rate of 6% and easy terms.