IMG may favour more time to telcos for spectrum payment

New Delhi: The inter-ministerial group setup to look into the financial stress in the telecom sector may suggest extending the timeline for deferred spectrum payment by telcos, as this was among the proposals on which the panel reached a "consensus", an official said.

 The drafting of report will take a day or two and the panel will "try" to meet this week again.

"The IMG will attempt to finalise its report by August 27. There is consensus on various issues, including increasing the time for deferred spectrum payment and shifting from PLR to MCLR for interest and penalty payments with regard to licence fee and spectrum charges," the IMG member said.

The inter-ministerial group, constituted to suggest measures to ease the financial stress in the telecom sector, held its meeting here on Tuesday. The Telecom Commission is slated to meet on September 1 and IMG report could be placed before the Commission during that meeting.

The IMG which comprises senior officials from the ministries of finance and communications last met on August 11 and deliberated on various proposals that can be taken to address the financial woes of the industry.

The inter-ministerial panel is learnt to be favourably considering measures, including increasing period of deferred spectrum payment to 16 years, a proposal that would improve the cash flow of telecom companies.

At the last meeting, some members felt that large-scale policy intervention may not be required as green shoots have become visible in the sector during the first quarter.

Currently, a portion of spectrum auction amount is taken as upfront payment by the Department of Telecom (DoT) and the balance after a two-year moratorium is paid out every year in 10 instalments. There are indications that the telcos could be given 16 years instead of 10 years for such deferred spectrum payment.

The other proposals being discussed include convergence between DoT and RBI guidelines on the issue of allowing spectrum as collateral.

The IMG is also considering a proposal to shift from PLR to MCLR for interest and penalty payments, pertaining to licence fee and spectrum usage charges.

The inter-ministerial group, in June, had held extensive discussions with all telecom players and large banks on the industry's financial difficulties.

Established telecom operators have been flagging pressure on profitability and revenue, and have blamed competition intensified by the entry of Reliance Jio for their woes.

The industry has a debt of over Rs 4.6 lakh crore and has been seeking sops to overcome the crisis.