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The Inter-Ministerial Group (IMG) on telecom industry met on Tuesday and hinted on extending the timeline for deferred spectrum payment by telcos to 16 years instead of 10 at present.
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. Sources said the IMG will again meet on August 28 or 29 and finalise the report so that it can be placed before the Telecom Commission on September 1.
The extension of timeline for deferred spectrum payment was one of the proposals that the IMG reached a ‘consensus’ on, a government official said, adding that drafting of report will take a day or two, after which the panel will meet again.
“There is a consensus on various issues, including increasing the time for deferred spectrum payment and shifting from prime lending rate (PLR) to marginal cost of funds-based lending rate (MCLR) for interest and penalty payments with regard to licence fee and spectrum charges,” the official said. Set up on May 16 to work on the stress in balance sheets in the telecom sector, and has been studying balance sheets of the past three years (2014-15, 2015-16 and 2016-17) of telcos.
In its last meeting on August 11, the IMG had discussed that a policy intervention may not be required as ‘green shoots’ in the telecom sector have started to appear in the first quarter. It was supposed to work on the issues and submit its report in three months.
Telecom Minister Manoj Sinha had told the Lok Sabha during question hour on August 3 that IMG will submit its report in 20 days, based on which, the government can take corrective measures.
The IMG, which comprises senior officials from the ministries of finance and communications, 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.
Some IMG members felt that large-scale policy intervention may not be required as ‘green shoots’ have become visible in the sector during the first quarter.
Other proposals 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.
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