Telecom Package – Disappointed

The Government has given a telecom package that does not have any direct monetary benefits. So, the industry will be disappointed. However, a moratorium for four years on payment of statutory dues by telecom companies as well as allowing 100% foreign investment through the automatic route have been announced. Non telecom revenues have been excluded from the definition of AGR [Aggregate Gross Revenue only telecom revenues considered]. So, a benefit to companies like GAIL, Powergrid where there were issues as their telecom revenues are quite small and insignificant. Interest rates of MCLR +2% interest rate has been offered for non-payment of dues and penalty waived and abolished. Annual compounding of interest to be done instead of monthly compounding. For future auctions durations of auctions will be 30 years instead of 20 years, which will bring down the annual payment of spectrum fees. After 10 years, spectrum or the business could be sold. Spectrum sharing is also being completely allowed and has been made free. So, measures are a disappointment for the time being.

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