Telcos get breather: 100 per cent FDI, relief on dues

Cabinet grants 4-year moratorium on payment of statutory dues. Representation pic

The Union Cabinet on Wednesday approved a relief package for the telecom sector that includes a four-year moratorium on payment of statutory dues by telecom firms, but it will have to be paid within the 10 years timeframe as decided earlier. It has also allowed 100 per cent Foreign Direct Investment (FDI) via the automatic route. Earlier, automatic investment routes were limited to 49 per cent level, and approval from concerned authorities was required for foreign investment beyond 49 per cent level.

Telecom Minister Ashwini Vaishnav said the definition of AGR, which had been a major reason for the stress in the sector, has been rationalised by excluding non-telecom revenue of firms. Penalty on payment of licence fees, spectrum user charges and all kinds of charges have been completely scrapped.

Cellular Operators Association of India (COAI) Director General S P Kochhar said in a statement, "Going forward, this will give some relief to our greatly stressed sector for sure."

Telecom operator Bharti Airtel Chairman Sunil Mittal said the reforms will ensure that the industry is able to invest fearlessly and support India's digital ambitions.
Bharti Airtel said the reform package heralds a new dawn for the Indian telecom industry and will catalyse explosive growth of this vital sector. He added that the reforms pave the way for a sustainable three private plus one state-owned telecom operator structure to serve a large market like India.

Meanwhile, Vaishnaw later said the 5G spectrum auctions will "most probably" be held in February 2022, and the government may even try for a January timeline.

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