IMG may meet next week to resovle financial stress issue in telecom sector

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With an aim to resolve financial stress issue from telecom sector, the inter-ministerial group (IMG) is likely to meet again next week on August 16 or 17.

IMG may meet next week to resovle financial stress

The panel is likely to meet again on August 16 or 17 to take the final decision on the measures," sources close to the development said.

Sources said that "Big policy interventions may be not required as ups and down are part of any business and some green shoots are already visible."

However, sources  further added that, "The panel is likely to give some relief in form of increased period for payment for spectrum loans to 16 years from the current 10 years."

The sector is in under financial stress due to increasing pressure after the entry Mukesh Ambani-led Reliance Jio with free services and cheap data offers to lead to massive fall in revenues and a debt of about Rs. 4.6 lakh crore.

To recall, Telecom Minister Manoj Sinha said that the Government will not shy away from taking the bold decisions.

He said, "Once the report is with us, then based on the report we will take immediate action and Government is not scared to take bold decisions."

The research firm, Ind-Ra also says that the incumbent telcos are moving towards more bundling of voice and data plans in line with RJio's voice calling bundled with data. Blended average revenue per user (ARPU) is slated to decline by 10 percent in FY18.

However, another report by Jefferies says that the growth of Reliance Jio subscriber base and its free offering till the end of fourth quarter of 2016-17, has led to an 11.7 percent year-on-year decline (8.5 percent quarter-on-quarter decline) in industry revenues.

Read More About telecom | sector | news | DoT | manoj sinha

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