Govt to reject telcos demand on spectrum payment

The Finance Ministry is likely to reject a demand from the telecom industry for a two-year ban on payment for spectrum bought in previous auctions, reported Business Standard.

"Given the challenging fiscal situation this year, the government is banking on non-tax revenue items to make up for some of the anticipated tax revenue shortfalls. So any relaxation or waiver cannot be given on spectrum fee," a senior Finance Ministry official was quoted as saying.

Recently, the Supreme Court ruled in favour of the government on recovering adjusted gross revenue (AGR) of about Rs 92,000 crore from telecom service providers including Bharti Airtel, Vodafone, Reliance Communications and state-owned MTNL and BSNL.

The setback to the telecoms came as the apex court upheld the AGR definition formulated by the Department of Telecom (DoT) and termed as "frivolous" the nature of objections raised by them.

Revenues from other communications services have been budgeted at Rs 50,520 crore during the current year. In 2018-19, the Budget Estimate under the same head was Rs 48,660 crore, but the Revised Estimate was lower at Rs 39,245 crore, according to the report.

The worst hit by the spectrum payment front is Vodafone-Idea that is facing over Rs 21,000 crore liability in interest and penalty alone after a Supreme Court ruling on the definition of telecom revenues. Vodafone Idea also said it would approach the government for relief, including a waiver of interest and penalties.