Left Menu
Development News Edition

CoS meets to discuss bailout package for telcos; DoT working on demand notices

CoS meets to discuss bailout package for telcos; DoT working on demand notices

The Department of Telecommunications (DoT) has started work on issuing demand notices seeking Rs 1.4 lakh crore in past dues from mobile-phone firms even as a high-level committee of secretaries met on Tuesday to explore a financial bailout package for the telecom sector. Sources said the DoT is working out the exact liability that Bharti Airtel, Vodafone Idea Ltd, and other telecom operators owe to the government following the October 24 Supreme Court judgment on the way statutory dues such as license fee and spectrum usage charge has to be calculated.

The demand notices will be issued in next two weeks after an assessment in light of the court order is done, they said adding telecom operators are expected to pay them within Supreme Court mandated 90 days time period. Parallelly, a Committee of Secretaries, headed by Cabinet Secretary Rajiv Gauba, has begun work on a financial bailout package sought by the debt-lade telecom carriers.

The panel, which includes secretaries of the department of telecom, law, corporate affairs, revenue and economic affairs as also Niti Aayog CEO, had its second meeting on Tuesday but no decision has been taken, they said. It has been asked to look at the demands of telecom service providers (TSPs) for deferment of payments they had promised for the spectrum won through auction as well as consider lowering airwave usage charges.

It has also been asked to consider lowering the obligation of TSPs for providing 5 per cent of their annual revenues for the Universal Service Obligation Fund (USOF), they said. In parallel, sector regulator Trai is expected to examine prescribing minimum charge for voice and data services, which according to old telecom operators will ensure long-term viability and robust financial health of the sector.

The panel was set up a day after an unsigned paper seeking a waiver of interest and penalties on the unpaid amount, as well as staggering payment of principal licence fee over 10 years was submitted to the DoT on October 28 - the day Bharti Airtel Chairman Sunil Bharti Mittal and his brother Rajan Mittal had met Telecom Minister Ravi Shankar Prasad and Telecom Secretary Anshu Prakash. Citing the recent Supreme Court ruling that had upheld the government's position on including revenue from non-telecommunication businesses in calculating the annual gross revenue of telecom companies, a share of which is paid as licence and spectrum fee to the exchequer, the note sought a two-year moratorium on spectrum payments beyond April 2020 till March 2022, reduction in licence fee from 8 per cent to 3 per cent, and cutting USOF to 1 per cent.

Following the apex court order, Airtel, Vodafone-Idea and other telecom operators may have to pay the government a whopping Rs 1.42 lakh crore within three months. According to the DoT's preliminary calculations, Bharti Airtel faces a liability of around Rs 42,000 crore after including licence fees and spectrum usage charges, while Vodafone-Idea may have to pay about Rs 40,000 crore. Jio may have to pay around Rs 14 crore.

The remaining liability is with state-owned BSNL/MTNL and some of the shut/bankrupt companies. Though the matter had been in courts for over a decade, the companies had not made any provisions for potential liability in their books of accounts and in absence of which it is now knocking on government doors for relief.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)



Hyderabad Encounter: Time to review modern judiciary and restore people’s confidence

Its probably for the first time in the history of independent India, the parliamentarians, chief ministers and ministers in the Union and State governments are openly supporting an encounter. This indicates the people from top to bottom hav...

What happens to your outstanding loans if the bank falls?

... ...

Time for a change! Innovations to stop the growing plastic pollution

As the planet is drowning in plastic pollution, many new innovative approaches and solutions have emerged to effectively deal with the menace....

How to avoid fake universities and fishing bait like Farmington

As education sharks are roaming around to prey, we present a guide on how to mitigate hunters and reach to a genuine universityinstitute. In this era of commercialization of education, the fake universities and economic frauds in educationa...


Latest News

FBI says it presumes base shooting was act of terrorism

Pensacola Florida, Dec 9 AP The Saudi gunman who killed three people at the Pensacola naval base had apparently gone on Twitter shortly before the shooting to blast U.S. support of Israel and accuse America of being anti-Muslim, a U.S. offi...

Redskins RB Guice exits with knee injury

Washington Redskins running back Derrius Guice was ruled out to return to Sundays game after leaving in the second quarter when he took a hit to his left knee at the end of a 23-yard gain. Guice suffered the injury when taken down by Green ...

Saints TE Cook departs with concussion

New Orleans Saints tight end Jared Cook departed Sundays game against the San Francisco 49ers due to a concussion. Cook caught two touchdown passes in the first 1009 of the contest. But on the second scoring grab -- a 26-yarder -- he was hi...

UPDATE 3-Lebanon's Hariri reemerges as PM candidate as Khatib withdraws

Lebanons leading Sunni Muslim politician, Saad al-Hariri, re-emerged as a candidate for prime minister on Sunday when businessman Samir Khatib withdrew his candidacy to lead a government that must tackle an acute economic crisis.President M...

Give Feedback