Telecom PSUs likely to get waiver, private firms to pay in phases

The Department of Telecom is expecting to raise Rs 30,927 crore from imposing a one-time levy on incumbent players but may get only Rs 6,000 crore this year.

It has moved a Cabinet note seeking approval of the levy. The Empowered Group of Ministers (EGoM) has cleared the proposal.

However, the actual income could be only about Rs 6,000 crore this year. That’s because about Rs 11,000 crore, to be paid by public sector telecom companies BSNL and MTNL, may be waived. The DoT has sought EGoM’s approval for a bail-out package for the two PSUs.

Of the balance Rs 20,000 crore to be paid by the private operators, the Government could get only about 30 per cent this year. The operators have been allowed to pay the money in instalments over a ten-year period. So if all the operators chose to pay in instalments the Government will end up with just Rs 6,000 crore this year.

In October, the Group of Ministers took the decision to collect a one-time spectrum fee from all operators with more than 4.4 Mhz for the remaining period of their licences. But it added a new twist by deciding to collect an additional levy from operators who were given more than 6.2 Mhz spectrum from July 2008 onwards. The impact of this additional levy will be around Rs 4,000 crore on all operators put together.

The larger impact will be from the decision to collect the one-time fee on excess spectrum over 4.4 Mhz for GSM players and over 2.5 Mhz for CDMA operators. The EGoM’s decision on one-time fee will now be sent to the Cabinet for final ratification. The levy will be extrapolated from the final bid price that emerges in the upcoming auction starting November 12.

(This article was published on November 6, 2012)
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