The Union Cabinet on Wednesday cleared a relief package for the stressed telecom sector which entails relaxation to telecom companies on payment of their long outstanding dues, including a four-year moratorium on spectrum installment which is due in April 2022.
The package is aimed at giving relief to companies like Vodafone Idea, that owe a huge amount to the government in statutory dues, sources said.
The relief package cleared by the Cabinet, consists of a component where telecom companies may get an option to convert interest on their spectrum dues amounting to four-year moratorium, into government equity.
The package could signal a solution to the long standing financial crunch being faced by telecom companies and their inability to pay dues worth thousand of crores of rupees in terms of spectrum fees, to the government.
Sources said that with the help of the moratorium route, the adjusted gross revenue (AGR) could be rejigged and spectrum usage charges may be reduced.
The decision by the Cabinet has come just weeks after Kumar Mangalam Birla resigned as chairman of the cash starved Vodafone Idea.
The company had long been seeking government’s intervention in terms of bailing it out financially.
Even Sunil Bharti Mittal, chairman of Airtel, the country’s second largest telecom company, had sought government’s help.
He had said that a major chunk of the telecom industry’s revenues goes in paying government taxes.
Source: https://www.ndtv.com/business/telecom-firms-get-4-year-moratorium-on-spectrum-dues-in-huge-relief-for-sector-sources-2541536#pfrom=home-ndtv_topscroll