Government Provides Major Relief to Telecom Service Providers

Government Provides Major Relief to Telecom Service Providers

Cabinet has approved a number of structural and process reforms in the Telecom sector including a four-year moratorium on spectrum related payment.

In order to boost Telecom sector, on 15th September, 2021, various reform measures approved are expected to protect and generate employment opportunities, promote healthy competition, protect interests of consumers, infuse liquidity, encourage investment and reduce regulatory burden on Telecom Service Providers (TSPs).

Key relief measures:

  • 100% FDI has been allowed in sector through automatic route
  • About 80% reduction in bank guarantee requirements against licence fee and other similar levies
  • For auctions held henceforth, no bank guarantees will be required to secure instalment payments
  • In future auctions, tenure of spectrum increased from 20 to 30 years
  • No spectrum usage charge for spectrum acquired in future auctions
  • No additional SUC of 0.5% for spectrum sharing
  • Interest rates rationalised, penalties removed with effect from October 1, 2021

Further, the government has approved moratorium of upto four years in annual payments of dues arising out of the Adjusted Gross Revenue (AGR) judgement, with however, by protecting the Net Present Value (NPV) of the due amounts being protected. While, moratorium on due payments of spectrum purchased in past auctions (excluding the auction of 2021) for upto four years with NPV protected at the interest rate stipulated in the respective auctions.

Click here for detailed official press release:

Knowledge Source:

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