The Department of Telecommunications (DoT) and the finance ministry have broadly agreed on relief measures for the debt-laden telecom sector that may include nearly doubling the deferred payment period for spectrum bought in auctions and reducing the interest burden on companies. The relief measures could also include allowing spectrum to be used as collateral for loans, a move that was permitted by the Reserve Bank of India in 2012 but opposed by the telecom department. A relaxation of the 5% universal services obligation fund (USOF) levy could also be on the table. Extending the payment period to 18 years from 10 years now, both inclusive of a two-year moratorium, could increase cash flows by Rs.55,000 crores. Telecom companies have blamed their financial woes on the impact of Jio’s entry and its promotional offers. Jio has said it’s the result of aggressive bidding at spectrum auctions and lack of investment in new technologies. License fee collection from telecom services dropped 9% to Rs.3,361 crores in the March quarter from the preceding one, while AGR has dropped 11% to Rs.40,831 crores in the same period, as per Trai data.

(Economic Times)