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The Telecom Commission is learnt to have conveyed to the Department of Telecom (DoT) its reservations on replacing prime lending rate (PLR) with marginal cost of fund-based lending rate (MCLR) for calculating the interest paid by operators on delayed payment of licence fee and spectrum usage charge (SUC).
The government’s top decision-making body for the sector has directed the DoT to ensure that the interest rate charged on delayed payments continue to act as a disincentive to the companies, sources told BusinessLine .
The high-level panel has asked the Department to review the recommendation and revert to it.
The replacement of PLR into MCLR was part of the final report of the inter-ministerial group (IMG) on financial stress in the telecom sector. The group was set up in May to study the financial stress of the sector and suggest solutions.
The IMG had earlier recommended that the deferred payment schedule for spectrum should be increased to 16 years from 10 years and replacement of the PLR with MCLR. The telecom service providers (TSPs) also wanted it to be removed.
According to analysts tracking the sector, the interest waiver on deferred spectrum payments could help the companies save around ₹30,000 crore annually. Currently, the total debt for the industry is pegged at around ₹5 lakh crore, from which around ₹2.70 lakh crore are related to the deferred spectrum payments to the Centre.
The other two recommendations include ‘Deferred payment liability of telecom service providers (TSPs) on spectrum’ and ‘Amendments to spectrum trading and guidelines’ made by the IMG.
“The Commission has also directed the DoT to calculate the total relief required by the sector as well as work out two more options of 12 and 14 year instalments to provide the cash flow relief to the telcos. This is also to be submitted to the Commission for consideration,” sources said.
On ‘amendments to spectrum trading guidelines’, the Telecom Commission said the DoT can obtain legal opinion on “whether such an amendment should be made applicable retrospectively or prospectively”. It has asked the Department to resubmit for consideration.
The Telecom Commission is expected to meet again next week for more updates and clarifications so that a decision can be arrived at on the panel’s recommendations after which it will be sent to the Cabinet for approval.
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