CoS on telecom relief package disbanded: Govt Source

CoS on telecom relief package disbanded: Govt Source

A rickshaw puller speaks on his mobile phone in front of advertisement billboards belonging to telecom companies. Photo by REUTERS

With the Cabinet allowing telecom operators to defer payments due for airwaves bought via auction until the end of March 2022, a committee of secretaries constituted to look at relief package for the debt-laden and loss-making sector has been wound-up, a top source said.

The Committee of Secretaries under Cabinet Secretary Rajiv Gauba was last month constituted to examine "all aspects" of "financial stress" faced by service providers such as Bharti Airtel and Vodafone-Idea Ltd and suggest measures to mitigate them.

The panel was constituted shortly after the Supreme Court upheld the government's position on including revenue from non-telecommunication businesses in calculating the annual adjusted gross revenue (AGR) of telecom companies, a share of which is paid as licence and spectrum fee to the exchequer.

The source replied in affirmative when asked if the CoS has been disbanded now.

The CoS, he said, held several meetings to discuss the extent of help the government could offer and made its recommendations to the government earlier this month.

Acting on its recommendations, the Cabinet on November 20 deferred spectrum payment dues from telecommunications companies for two years to help an industry ravaged by a years-long price war, mounting debt and the Supreme Court decision last month demanding Rs 1.4 lakh crore in overdue fees.

The moratorium will be for two years beginning April 2020 but the interest, as stipulated in airwave auctions, will continue to be paid. The relief totalled to Rs 42,000 crore -- Rs 11,746 crore to Bharti Airtel, Rs 23,920 crore to Vodafone Idea and Rs 6,670 crore to Reliance Jio.

The decision to wind-up the CoS follows the government's unwillingness to intervene in the Supreme Court-mandated statutory payments, sources said.

While the telcos are seeking a waiver of interest and penalties on the dues and extended payment timelines instead of three months mandated by the apex court, sources said the matter was purely a legal issue and any extension or calibration can only be done only under the direction of the court.

Bharti Airtel and Vodafone Idea on Friday filed a review petition before the Supreme Court on the issue.

On the issue of applicability of the Supreme Court ruling on calculation of the adjusted gross revenue (AGR) - a percentage of which is paid to the government in statutory dues, on other entities using spectrum such as Internet Service Providers (ISPs), the source said while these cases were separate and such players were not party to the cases, they still have to have obligation to pay their statutory dues.

The source said the government has asked operators to make combined efforts to relieve the stress, including raising voice calls and data tariffs.

He also questioned why operators, who knew their past liabilities, did not make contingency provisions in the books of accounts for a matter that has been pending since 2011 in the apex court.

On the operators' demand for waiver of penalty and interest dues, the source said that any relief has to come from the court. 

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