AGR dues: Telecom trade physique COAI rings alarm bells; asks govt to ease phrases for cost, reduce in licence charge

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New Delhi: Trade physique COAI has despatched out a misery sign to the federal government looking for simpler phrases for cost of statutory dues by telcos, together with extension of loans at decrease charges to cowl AGR liabilities, as additionally quick implementation of ground costs, to rescue the troubled sector.

With the telecom trade plunging right into a deep, unprecedented disaster, the affiliation has raised an alarm over banks’ unwillingness to take any danger with regard to the sector, and asserted the “need to give a clear message to banks that government is there to support the sector”.

“Banks are currently unwilling to take any risk with respect to the telecom sector and are constantly asking telecom service providers to reduce their exposures by refusing to issue new bank guarantees or even to renew bank guarantees,” COAI Director Basic, Rajan Mathews mentioned in a letter to Telecom Secretary Anshu Prakash.

Mobile Operators’ Affiliation of India (COAI) has additionally mentioned that the requirement of economic financial institution ensures for securing licence charge funds ought to be achieved away with.

 AGR dues: Telecom industry body COAI rings alarm bells; asks govt to ease terms for payment, cut in licence fee

Representational picture. Reuters

In case Telecom Division is of the view that monetary financial institution ensures are wanted, the identical ought to be diminished to 1 quarter of licence charge, as per the trade physique.

COAI additionally sought a right away reduce in licence charge levy to 3 % from eight % and discount in spectrum utilization costs.

Citing India’s low common income per consumer in comparison with markets like China, Brazil and Russia, it additional mentioned knowledge costs in India are a fraction of these in markets are US, China, Germany, France and others.

“Therefore, floor pricing is imperative to ensure the sector is sustainable and in a position to bear the deferred spectrum and adjusted gross revenue (AGR) dues, while continuing to invest in world class networks,” COAI mentioned.

COAI’s letter, dated 26 February, got here whilst Vodafone Thought has reportedly made it clear to the federal government that it will not be capable of pay court docket mandated AGR dues in entirety, except a bailout is prolonged instantly.

In all, 15 telecom entities owe the federal government Rs 1.47 lakh crore in unpaid statutory dues — Rs 92,642 crore in unpaid licence charge and one other Rs 55,054 crore in excellent spectrum utilization costs.

Of the estimated dues that embrace curiosity and penalty for late funds, Airtel and Vodafone Thought account for about 60 %.

These dues arose after the Supreme Courtroom, in October final 12 months, upheld the federal government’s place on together with income from non-core companies in calculating the annual AGR of telecom firms, a share of which is paid as licence and spectrum charge to the exchequer.

The Supreme Courtroom, earlier this month, rejected a plea by cellular carriers akin to Bharti Airtel and Vodafone Thought for extension within the cost schedule and requested firms to deposit their previous dues for spectrum and licences.

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