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Telecom Commission gives nod to extension of spectrum payment duration and lowering of interest on dues

October 01, 2017


In a move that will bring some relief to operators, Telecom Commission has recently accepted some of the recommendations of the inter-ministerial group (IMG) constituted in May 2017 to suggest remedies to improve the ailing financial health of the sector. To this end, Telecom Commission has given its go ahead to extend the tenure of payments for auctioned spectrum from 10 years to 16 years.

The Telecom Commission has also cleared lowering the rate of interest on unpaid dues or delayed payments from 14 per cent to 12 per cent. This is being done by replacing the prime lending rate (PLR) with marginal cost of fund-based lending rate (MCLR) to calculate the interest owed by telecom operators for delayed payment of licence fee and spectrum usage charges.

Meanwhile, the apex body has sent one of the IMG’s recommendations pertaining to the relaxation of cap on spectrum in a given band to the Telecom Regulatory Authority of India (TRAI) for its views. The Commission has also sought legal opinion on the adjusted gross revenue (AGR) which will be applicable on receipts from spectrum trading. Operators currently pay around 8 per cent of their AGR as licence fee and an additional 3 per cent as spectrum usage charges.

During the meeting the Telecom Commission, has also approved guiding principles and roadmap of the new telecom policy. The apex body has decided that draft of the new policy should be ready for approval by November 30, 2017, following which it will be made open for consultation in December 2017. A Cabinet note on the policy is likely to be issued by January 2018, and the final policy will be released by March 2018.

The approved measures, however, will only give piecemeal sops to operators and not address systematic issues faced by them. These approved measures will now be sent to the Cabinet for final approval.



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