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Package For Telcos: CoS to Mull Spectrum Payment Deferment

Package For Telcos: CoS to Mull Spectrum Payment Deferment

Sentinel Digital DeskBy : Sentinel Digital Desk

  |  30 Oct 2019 2:20 PM GMT

New Delhi: A relief package to ease the financial stress of telecom service providers is in the works. A Committee of Secretaries (CoS) headed by the Cabinet Secretary has been set up to look into the demands of the industry for deferment of spectrum auction payment due from TSPs for the years 2020-21 and 2021-22 and reducing the Universal Service Obligation Fund (USOF) charge which is currently at 5 per cent to 3 per cent as suggested by TRAI.

In parallel, the government expects that the TRAI will also examine the aspect of minimum charge for voice and data services to ensure that the financial health of the telecom sector remains robust and viability is sustained. According to sources, a Committee of Secretaries (CoS) under the Cabinet Secretary will examine all aspects and suggest measures to mitigate the financial stress being faced by the telecom sector, keeping in view the larger public interest and improving telecom services for the subscribers. The CoS will look into the demand for deferment of Spectrum auction payment due from TSPs for the years 2020-21 and 2021-22 in order to ease the cash flow situation of the Industry.

Also on agenda will be a re-look at the USOF charge which is currently at 5 percent while the TRA1 in their earlier recommendations have suggested for reduction of this charge to 3 percent. The request of telecom service providers for the reduction of Spectrum Usage Charges (SUC) may also be examined, sources said. The CoS is expected to meet shortly and submit its recommendations in a time-bound manner.

Representations have been received from major telecom companies regarding the financial stress being faced by them. Future commitments for payments of spectrum purchased by TSPs and the license fee including the contribution to Universal Service Obligation Fund (USOF) have been cited as issues that require to be looked into.

In this regard, recommendations of TRAI on the reduction of USOF contribution and spectrum usage charge is being relied upon by the TSPs. The TSPs claim that a large amount of input tax credit is available in the government account, which they have requested to be adjusted against future government levies. Further, the recent Supreme Court Order on the definition of gross revenue is expected to further enhance the financial stress of these TSPs. A case is also being made for viable pricing for voice and data, which falls in the realm of TRAI. (IANS)

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