Telecom Commission seeks more clarification on IMG recommendations

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

    The Telecom Commission (TC)has sought clarifications from inter- ministerial group (IMG) on some of the recommendations in deferred spectrum payments by telcos to 16 years against 10 years at the present.

    Telecom Commission seeks more clarification on IMG recommendations

    TC has asked for more details on some of the recommendations made by IMG.. especially on the deferred payment period for spectrum bought as well replacing PLR with MCLR, sources close to the development said.

    The IMG was set up in May this year to suggest reforms in the telecom sector.

    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.

    Sources further said that "holistic view" on the entire report will be taken at the next meeting once the clarifications sought, come in. After the commission takes a call, the proposals will be placed before the Union Cabinet for approval as these entail changes in the spectrum auction document.

    To recall, Vodafone Group Chief Executive Officer, Vittorio Colao has written to telecom minister Manoj Sinha seeking a cut in interest rates for deferred spectrum payments and concerns over a reduction in Mobile Termination charges (MTC).

    He said, "We hope that the IMG will recommend a reduction in the interest rates for deferred spectrum payments to 6.25 percent in line with the improved macroeconomic trends and an increase in the period of payment for spectrum."

    He also commented, "We are seriously alarmed to see reports that the Regulator is considering a reduction in MTC at a time when the industry is facing such immense hardships. There are only a few operators, like us, who have invested heavily in both rural and urban areas and are proud to have brought connectivity to every Indian's hand. Today 97 percent of a population is covered by telecom. Any move to further reduce MTC risks destroying the very companies that have invested to build this industry."

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