The Cabinet Committee on Economic Affairs on Wednesday provided relief to the financially-stressed telecom sector by deferring spectrum auction payments for two years till 2022. However, the companies will have to pay applicable interest on the deferred spectrum payments.
The move will provide Bharti Airtel, Vodafone Idea and Reliance Jio benefits worth Rs 42,000 crore – Rs 11,746 crore for Airtel, Rs 23,920 crore for Vodafone Idea and Rs 6,670 crore for Jio, reported PTI. The decision came days after the three telecom majors announced an increase in tariffs.
Telecom operators owe the government nearly Rs. 1.47 lakh crore in licence fee and spectrum usage charges, the communications ministry told the Parliament on Wednesday. “We will not let monopoly prevail in the sector,” an unidentified government official told PTI. “This is to relieve the distress in the telecom sector.”
The telecom companies have been seeking relief from the government after an adverse Supreme Court judgement last month that upheld the Centre’s broader definition of revenue. The government calculates levies on telecom operators on the basis of this definition. In its order, the top court excluded revenue from non-core telecom operations such as rent, dividend and interest income in the reporting of financial results. The court rejected the definition of adjusted gross revenue proposed by telecom operators.
Last week, Bharti Airtel and Vodafone Idea posted huge quarterly losses because of the judgement. Vodafone Idea declared a loss of Rs 50,922 crore in the second quarter of the current financial year, while Bharti Airtel had a loss of Rs 23,045 crore. Vodafone India’s loss was the largest ever for an Indian company.