The Cellular Operator Association of India (COAI) has asked the Department of Telecommunications (DoT) to increase the tenure of the leased spectrum from 20 years to 40 years. Further, the industry body wants DoT to increase the moratorium period on spectrum payments to be increased to 10 years from the current 2 years. COAI has requested DoT to include these demands in the relief package it comes out with in the near future.
If the DoT includes these points in the relief package, it will be a major boost for the industry. It will help with getting more new investors on board and further expand the confidence of the lenders in the telcos. As per a Financial Express report, the COAI has requested the DoT and Finance Ministry to come out with a relief package for the telecom industry.
What Will Relief Package for the Telecom Industry Include?
There are many reports saying that the relief package for the telecom industry would include things such as redefining the adjusted gross revenue (AGR) dues and excluding the non-telecom revenues from the final amount. Further, the spectrum usage charges (SUC), license fees (LF), and bank guarantees (BG) might be reduced.
COAI wants the government to reduce the interest rate on all outstanding deferred payment liabilities for getting spectrum to be reduced to 4% or even lesser. The industry body has requested the government to keep the same low interest rate for all future auctions as well.
There’s no word on when the DoT and the Finance Ministry will come out with the relief package for the sector, but there’s one thing for sure, whenever a relief package is introduced, a flurry of new investors would jump in the sector. The telcos have also requested the sector regulator to complete the consultation paper on the floor price for the industry. A floor price might be a necessary evil right now.