Telecom Commission allows telcos to pay for spectrum in 16 years

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By: PTI | New Delhi |
Published:September 30, 2017 10:06 am


Under the new rule, if approved by the Cabinet, telecom operators will need to pay 12 per cent interest on penalties and delayed payments.

Telecom Commission, the apex decision-making body at the telecom department, approved extension of time-period for the payment of spectrum bought in auctions by telcos to 16 years from the current 10 years. Deferred payment option for spectrum was one of the key demands of telecom operators that they submitted before the inter-ministerial group (IMG) — tasked with finding a remedy to the financial difficulties of the telecom sector — to provide relief to the sector reeling under debt of Rs 4.6 lakh crore.

Under the present system, telecom operators are required to make partial upfront payment and rest of the payments in 10 annual instalments after a moratorium period of two years. The commission also approved recommendation of the IMG to lower interest rate charged over penalties imposed on service providers with slight modification, a government source said.

“Telecom Commission has approved IMG recommendation to extend spectrum payment period to 16 years from 10 years at present. It has also approved lowering of interest rate on penalties imposed on telecom operator. It will be now charged on the basis of MCLR plus 400 basis points instead of prime lending rate,” the source said. Debt raised on SBI prime lending rate basis are charged interest of 13.7 per cent.

Under the new rule, if approved by the Cabinet, telecom operators will need to pay 12 per cent interest on penalties and delayed payments. “This is a welcome step of the government. It does give some relief to telecom operators. While the net payment value will remain same, they are getting more time to pay for spectrum. However, it does not address systemic financial stress of the sector which comes from levies to the tune of 29-32 per cent, high spectrum usage charge, licence fee etc,” Industry body COAI Director General Rajan S Mathews said.

The Telecom Commission also approved road map for formulating a draft of new National Telecom Policy (NTP). “We expect the draft of the policy to be sent to the Cabinet by January and its approval by March,” the source said. The guiding principal of the NTP is the Digital India vision and focus of telecom will be to be an enabler for economic growth, the source added.

The NTP will focus on connectivity for all, protection of consumer interest with affordable services and good quality of service, ensure privacy, data protection and cyber security. The policy will also focus on promoting design development and manufacturing of telecom equipment in India. The commission also approved installation of 2,817 mobile towers in the North East by BSNL with an outlay of about Rs 2,258 crore.

The inter-ministerial panel also cleared regulator Trai’s recommendation to mandate that every building plan should have duct for telecom cable and the completion certificate to the building should be given only if it has incorporated duct in the building. “This move will boost telecom connectivity inside the building. Now, the telecom ministry will write to the Ministry of Urban Development for implementation of this decision. Some part of the recommendations like sharing of the duct in buildings should be mandatory will be sent back to Trai,” the source said.

The commission is of the view the telecom operators should share infrastructure but it should be based on mutual agreement and the Telecom Regulatory Authority of India (Trai) should suggest an alternate mechanism if consensus is not reached among operators. The inter-ministerial panel has given nod to grant Rs 1,231 crore to the Telangana government for roll-out of second phase of Bharat Net project in the state along with its drinking water project Mission Bhagiratha.

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