The Indian Cabinet has approved a 2-year moratorium on spectrum fees for domestic telecommunications operators, The Economic Times reports, citing Finance Minister Nirmala Sitharaman. Given the current "fin stress" faced by major operators, the government decided to defer payments of spectrum auction installments due in the fiscal years 2020-21 and 2021-2022, the minister said.
The deferred amounts would be equally spread over the remaining installments, with interest added. Operators who opt for a 2-year deferred payment would have to provide a bank guarantee.
According to India’s communications ministry, domestic telecom operators owe the government nearly INR 1.47 trillion in licence fees and spectrum usage charges.
India’s Supreme Court recently ruled in favour of the government on the adjusted gross revenue (AGR) issue. The government and the telecom sector have long fought over the definition of AGR, which is used to determine the amount of regulatory and spectrum fees paid by operators. In its recent decision, the Court ordered operators to pay INR 920 billion in back fees to the government, an amount that could still increase if penalties and interest are added. The operators have been lobbying the state to relax the terms of payment or forgive some of the amounts.
