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Updated on: Monday, September 06, 2021, 06:22 PM IST

Teji Mandi Explains: Telecom sector in talks for a relief package?

Representational Image |

Representational Image |

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The government is in talks to plan a relief package for the debt-ridden telecom sector.

Media sources believe that the Finance Ministry and the centre might approve applications of 33 companies for the production linked scheme (PLI) for the telecom and networking companies. The telecom industry has been debt-laden for years now. Some media experts believe that the government may reduce the revenue share license fee or extend the moratorium period for spectrum payments.

Media Buzz

As per a report by The Times of India, the government might use the PLI scheme to help the telecom sector. Sources believe that the package would be released this month itself. While some believe that the moratorium would be increased for the sector. This would give the operators the time to plan out their 5G spectrum auction strategy.

Possible Measures?

It’s expected that the government might reduce the revenue share license fee to 6% from 8%. This would provide a relief of Rs 3,000 crore to the telcos. The Department of Telecom (DoT) could recommend changes in the FDI norms. The level of automatic inflow can be increased to 74% of FDI. Meanwhile, Vodafone Idea, Bharti Airtel and Reliance Jio had requested to reduce the license fee, spectrum usage charges and universal service obligation levy.

VIL in Hour of Need

Among the three telcos, Vodafone Idea is under a deep pile of debt. As many as 8 banks have lent to VIL. This means that the collapse of VIL will have a major implication for the banks. The company has to pay adjusted gross revenue liability of about Rs 50,000 crore. It further needs to clear bank debt, DoT payments and spectrum payments.

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Published on: Monday, September 06, 2021, 06:22 PM IST
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