Telcom Relief

Ashwini Vaishnaw, Minister for Communications, has approved nine structural reforms and five process reforms for the telecom sector.

Reforms:

Four-year moratorium on AGR and spectrum dues

1. AGR to not include non-telecom revenue

2. Delay in payment of statutory dues to not attract penalty

3. Spectrum life extended from 20 years to 30 years with a surrender option

4. 100 percent FDI (Foreign Direct Investment) allowed through automatic route

5. Indian Govt. will have the option to convert telecom dues to equity

6. Lower bank guarantees for statutory dues and no bank guarantees for spectrum auction

7. Spectrum sharing encouraged

8. No spectrum usage charge SUC for spectrum acquired in future spectrum auctions

The chances of the telecom sector becoming a duopoly is still high if Vodafone Idea fails to generate enough cash.

The liability is postponed rather than totally written off.

Preeti Kapoor