Cabinet approves relief measures for telecom sector


The Union Cabinet has also approved 100% foreign direct investment through automatic route in the telecom sector.

The Union Cabinet has approved nine structural reforms and five process reforms for the telecom sector, aimed at giving relief to companies such as Vodafone Idea that have to pay thousands of crores in unprovisioned past statutory dues.

The wide set of measures proposed entail reforms for the ailing sector by way of granting moratorium on unpaid dues, redefining adjusted gross revenue (AGR) prospectively and cut in Spectrum Usage Charges.

Telecom Minister Ashwini Vaishnaw said non-telecom revenue will be taken out of AGR. โ€œPM took a bold decision over AGR (adjusted gross revenue) today. A decision has been taken to rationalise the definition of AGR,โ€ he told the media after the Cabinet meet.

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The regime of penalty and interest on various license fees and charges has been rationalised with penalty being removed completely and interest been reduced. Future spectrum auctions will be for 30 years, as against the present 20 years.

The Ministry will also allow companies to surrender spectrum after paying a fixed charge in case of change in business environment. Spectrum sharing has been allowed completely.

The Union Cabinet has also approved 100% foreign direct investment through automatic route in the telecom sector.

The government has approved four-year moratorium for dues of telecom service providers. They will, however, have to pay interest.

Mr. Vaishnaw said the reforms are applicable from October 1 and none of them are with retrospective effect. โ€œThere will be further reforms when 5G spectrum is auctioned,โ€ he added.

The relief package for the telecom sector will come as a breather to the three private players at a time when Vodafone Idea is confronting an existential crisis.

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