NEW DELHI: Prime Minister Narendra Modi-led government’s timely stimulus to telecom companies would help financially-stressed telecom sector to wade through the cyclical downturn, telecom groups Thursday said.
“We welcome the government’s timely action to save the Indian telecom sector which is going through a cyclical downturn and financial crunch,” Sandeep Aggarwal, Chairman of the Telecom Committee at PHD Chamber of Commerce and Industry, and Co-Chairman, Telecom Exports Promotion Council (Tepc) said.
Following the Rs 70,000 crore worth relief package to the state-owned operators– Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL), the Cabinet on Wednesday approved a two-year moratorium on spectrum payments to private operators.
The move will, however, provide immediate relief worth Rs 42,000 crore to three incumbents– Bharti Airtel, Vodafone Idea and Reliance Jio.
“In view of the current financial stress faced by major telecom service providers and in pursuant of the recommendations by Committee of Secretaries, the government has deferred the receipts of spectrum auction installments due from the telecom service providers from the years 2020-21 and 2021-2022, the Finance Minister Nirmala Sitharaman Wednesday said.
Telecom lobby and trade groups have hailed the Centre’s move and believe that the telecom sector should get prominence on the back of increasing digital activities led by the ambitious Digital India program.
However, Delhi-based Cellular Operators Association of India (COAI), while welcoming the government’s step to defer spectrum payouts for two years, also said that more needs to be done including a long-pending demand of rationalisation of taxes.
Aggrawal further said that giving BSNL and MTNL, a new lease of life would demonstrate the government’s vision to discourage monopoly that would also benefit the consumers immensely.
“At the time of the financial crisis, the government’s hand-holding is needed to ensure that the industry is put back on a growth path. This financial support to the telecom sector will not only help the revival of BSNL but also see the Indian telecom companies continues to lead the government’s target of making India a $5 trillion economy,” he added.