Telecom stress: Govt forms panel to suggest measures

Ajith Athrady, DHNS, New Delhi,

Oct 29 2019, 15:28 ist
updated: Oct 29 2019, 15:28 ist

"Parallelly, it is expected that the TRAI will also examine the aspect of minimum charge for voice and data services to ensure that the financial health of the Telecom sector remains robust and viability is sustained," sources said. Photo/Pixabay

The government on Tuesday constituted a Committee of Secretaries (CoS) headed by the Cabinet Secretary to examine and suggest measures to mitigate the financial stress in the telecom sector.

The telecom sector is in distress with mounting debt crossing over Rs 4 lakh crore, mostly due to the tariff tussle. The official panel will look into the demand of the telecom service providers for deferment of Spectrum auction payment which is due from telecom firms for the years 2020-21 and 2021-22, in order to ease the cash flow situation of the telecom industry.

Stiff competition coupled with the recent Supreme Court order which upheld the Department of Telecom's narrative of Aggregate Gross Revenues and asked the telecom companies to shell out Rs 98, 000 crore has placed the sector under severe financial stress. The industry sought government intervention to address the issue.

"The CoS will re-look at the universal service obligation charge which is currently at 5% while the Telecom Regulatory Authority of India, in their earlier recommendations, have suggested for reduction of this charge to 3%. The request of telecom service providers for the reduction of Spectrum Usage Charges (SUC) may also be examined," sources in the DOT told DH.

"Parallelly, it is expected that the TRAI will also examine the aspect of minimum charge for voice and data services to ensure that the financial health of the Telecom sector remains robust and viability is sustained," sources said.

The CoS is expected to meet shortly and submit its recommendations in a time-bound manner. Based on the recommendation, the government will take action to help the sector which is reeling under a financial burden.

Commenting on the financial crisis in the sector, a senior official in the Department of the Telecom said that the government is sized up with the matter and will certainly facilitate an environment which continues to herald growth of the telecom sector, improves quality of service by telecom firms, generates resources for service providers for the expansion and renewal of telecom infrastructure and enable empowerment of people of India by access to broadband.