Government Mulls moratorium on spectrum payments

New Delhi: The government is considering a lifetime for telecommunications companies through a moratorium on spectrum payments mandated as part of a series of new steps to improve telcos health.
This happens at the time of Vodafone’s idea, which faces acute financial stress, has sent SOS to the government, citing the possible impact on 27 crore customers.
The step of the Telecom department, if it passes, will be an extension for the moratorium that has been running which was originally extended in November 2019 for the Fiscal Year 2020-21 and 2021-22.
Bailout, if approved, is for all telecommunication players and is not only limited to the idea of ​​a sick vodafone, where the main shareholders of Kumar Mangalam Birla appealed to government intervention to ensure that the company remains a concern.
This means that every support will also be extended to other players such as Bharti Airtel and Reliance Jio market leader, and will be worth thousands of Crores.
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Major who, they said, “too big to fail”.
Lenders both India and Global have exposure to 1.8 lakh Rs “The government is worried about the health of Vodafone’s ideas and especially the fact that further setbacks, or even collapsed, may have a debilitating impact on almost 27 crore their cellphones and the financial system.
Moratorium on payment The spectrum is one of the options considered.
However, no one is resolved until now, “said the source to TOI.
The proposal is being discussed “at the highest level” in the government, “both inside and outside the Department of Telecommunications”, sources added, showing that the Ministry of Finance and even the Prime Minister’s office had been sounded to him.
The idea of ​​Vodafone currently has a loan worth Rs 1.8 Lakh Crore (at the end of the fourth quarter 2020-21), and the last loss recorded reached Rs 7,022 Crore.
The company has exposure to thousands of crores with banks, while he must pay more for the government for spectrum and other contributions.
Apart from this, the idea of ​​Vodafone must also pay a little more than Rs 50,000 Crore to the government as part of AGR contributions after the Supreme Court verdict, even though the company has been given a ten-year schedule to make a payment.
The Telecommunications Ministry, led by Secretary Anshu Prakash, also took stock situations to resolve ways to ensure minimal interference.
Prakash also heads the digital communication commission, the top inter-ministerial agency is empowered to make decisions in the telecommunications sector.
But the challenge for the government is to assess whether the moratorium will effectively save the idea of ​​vodafone from future bankruptcy.
“This will be temporary assistance if their own business fundamentals do not improve,” another source said.
In the decision to suspend the previous spectrum payment taken in November 2019, Minister of Finance Nirmala Sitharaman said that the industry was distributed by RS 42,000 Crore Lifeline by delaying immediate payment.
It was also extended in poor financial health views from the telecommunications sector later, and according to estimates, direct payment assistance for Airtel at that time was Rs 11,746 Crore, for the idea of ​​Vodafone RS 23,920 Crore, and for Reliance Jio Rs 6,670 Crore.
However, the company has been mandated to pay interest on payment that is delayed so that NPV (the current value is clean) of the amount of debt protected.
Also, they must provide the Government of Guaranteed Financial Banks from the number of revised annual installments.
If another moratorium is extended now, the same term will apply, said the source.
Other reliefs were handed over to the company in 2017 when the DCC (later called the Telecom commission) has increased the tenurial payment period for the auction spectrum of up to 16 years against the 10 years mandated before.
It has also been done to increase cash for the company and help them plug because of financial difficulties.