Telcos may not get more time to pay spectrum fee

NEW DELHI/CHENNAI: The finance ministry is not in favour of giving any extension of the moratorium on spectrum dues to telecom companies due to tight fiscal position. According to sources in the finance ministry, many telecom companies, including Vodafone Idea, had requested an extension of the moratorium, but the ministry is reluctant to do so.

“Extension of moratorium on spectrum dues is not feasible. The matter was discussed and the general consensus was against giving any extension. We have been very prudent regarding expenditure and while the government is aware of the (Vodafone India) crisis, this will not be the best way forward. The final decision is yet to happen,” a finance ministry official said.

The government had earlier allowed a moratorium on spectrum dues for both FY21 and FY22. The next tranche of Rs 15,900 crore of non-AGR spectrum dues becomes payable from April 2022.Over the past few weeks, the Department of Telecommunications (DoT) has been examining and conducting discussions on a series of possible relief measures for the telecom sector as a whole. These relief measures would help all telcos if granted, but will be especially valuable to the cash-strapped Vodafone Idea in particular.

According to sources, among the measures discussed include reducing the currently 8% telecom licence fee down to 6%-a measure that regulator TRAI had already recommended; extending relaxations on the bank guarantees that telcos have to submit to the DoT for AGR and spectrum payments; and a further extension of the two-year spectrum payments moratorium which ends this financial year.

On June 7, KM Birla had written to the Cabinet Secretary seeking a moratorium on spectrum dues, floor pricing. But nothing happened so far. Now that the Vodafone Idea is on the verge of collapse, the pressure is mounting on the DoT to extend moratorium.The Department of Telecom (DoT) can’t allow the extension of the moratorium on its own and it would require a nod from the finance ministry.