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Telecom Relief Package: COAI expects some relief for the stressed sector

Cellular Operators Association of India (COAI) has given a thumbs up to the telecom relief package approved by the Cabinet on Wednesday, which will be implemented prospectively and provide a breather to the sector
COAI expects some relief for the stressed telecom sector from the Telecom Relief Package (File Image)
COAI expects some relief for the stressed telecom sector from the Telecom Relief Package (File Image)

New Delhi: Telecom industry body COAI lauded telecom relief package approved by the Cabinet on Wednesday, which will be implemented prospectively and provide a breather to the sector that is reeling under heavy stress. The Cabinet has approved the inclusion of only revenues earned from telecom services in the adjusted gross revenue and removal of penalty on dues to be paid to the government prospectively.

Cellular Operators Association of India (COAI) Director General SP Kochhar said in a statement, "On the face of it, we welcome the prospective directions of the package announced,  which is aligned with our long-standing asks. Going forward, this will give some relief to our greatly stressed sector for sure." Kochhar added that the industry takes it as an indicator of the government thinking and is keenly awaiting rationalisation of costs and processes of 5G roll-out. "Structured comments will follow after the package is analysed in detail."

Telecom Minister Ashwini Vaishnaw said the Cabinet has allowed a 4-year moratorium on all dues that telecom operators have to pay to the government, but it will have to be paid within the 10 years timeframe as decided earlier.

KS Legal & Associates Managing Partner Sonam Chandwani said, "This will give troubled telecom carriers like Vodafone Idea much-needed breathing room as they pay crores of rupees in unprovisioned previous statutory dues. The liability is postponed rather than totally written off," as reported by news agency PTI.

She added that the banks'' association breathes a sigh of relief, as they owe large sums to Vodafone. "Though it is unclear how Vodafone will pay off the obligations, the extra time does help with stress management."

Chandwani also said the fee on existing spectrum income is unlikely to be reduced.

"The respite is timely and will help telecom companies navigate the market. Liability is postponed but not erased. Given Vodafone''s severe financial state, it's uncertain how it will pay off its debts and stay viable," Chandwani said.

The telecom minister said Prime Minister Narendra Modi has given the mandate to design and manufacture core and radio access network technology in the 4G and 5G networks of the country in the coming months.

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He said indigenous technology will be deployed in the BSNL network in the coming months.

Telecom Equipment Manufacturers Association of India (TEMA) Chairman Emeritus N K Goyal said, "For the first time since independence, during 75 years of Azadi ka Amrit Mahotsav, Indian designed, developed and manufactured 4G and 5G will be deployed in private and PSU (public sector undertaking) telecom operators networks. We believe this should be a road map for 6G also."

The minister said that 100 percent of FDI (foreign direct investment) in telecom via the automatic route was approved by the Cabinet. Earlier, automatic investment routes were limited to 49 per cent level and approval from concerned authorities was required for foreign investment beyond the 49 per cent level.

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