Government Relieves Telcos From 42,000 Cr Spectrum Dues; Payments Deferred For Two Years

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In a major relief for telecom operators, the government has finally approved two years' moratorium on spectrum payment dues. This means that the Department of Telecommunication (DOT) will give an option to the Telecom Service Providers (TSPs) to defer payment of the spectrum auction installments due for 2020-21 & 2021-22.

Government Relieves Telcos From 42,000 Cr Spectrum Dues

 

The two-year break will provide Rs. 42,000 relief to telecom operators (Bharti Airtel, Vodafone Idea, and Reliance Jio). According to the estimates, Airtel will be benefited by Rs.11,746 crore, Vodafone Idea will be by Rs. 23,920 crore and Rs. 6,670 crore for Jio.

"We will not let the monopoly prevail in the sector. This is to relieve the distress in the telecom sector," a senior government official was quoted by The Hindu.

Furthermore, the decision for deferring spectrum payment installments for two years will be implemented within a fortnight. Meanwhile, IANS reported that the ministry has suggested operators take measures to improve their average revenue per user, which also means that the companies will hike tariffs. So, there are chances that the telcos will opt for a 15-20 percent hike.

The report states that the telcos should take some bold steps to increase their revenue, and the tariff hike is also of them. In fact, state-run telecom operator Bharat Sanchar Nigam Limited (BSNL), has announced that it is reviewing tariffs and will raise in December. "We are presently examining our voice and data tariff and will increase it from December 1, 2019," a senior BSNL official was quoted by ET.

Earlier this week, Airtel, Vodafone Idea, and Reliance Jio announced their plans to increase the prices from next month. But no one has disclosed the quantum of the hike. There is no doubt that a tariff hike will help companies to increase their revenue, but on the other side this will it will be a bad move from the customer's perspective.

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