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Give 2-yr-moratorium, lower interest rate, longer repayment time: COAI to govt
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SME Times News Bureau | 18 Nov, 2019
The mobile industry has urged
Government to help the telcos restructure their debts with a two-year
moratorium, lower interest and longer repayment time to help them come
out of the financial crisis which has been aggravated by the AGR order
of the Supreme Court.
"It will need a 20 per cent increase in
ARPU to get the companies on a better financial footing. To achieve
this, there will be an immediate need to restructure the debt to
Government with a 2 year moratorium, lower interest and a longer
repayment time. Also Government needs to eliminate or redefine AGR
prospectively and reduction in License Fees and Spectrum Usage Charges
to 3 per cent and 1 per cent respectively. GST rate needs to be brought
down to 5 per cent and GST should be removed from all government
payments for debt repayment, interest, LF and SUC," Rajan Mathews, DG of
the mobile industry association COAI told IANS.
The
July-September quarter (Q2) has dealt a body blow financially to the
Indian telecom sector AGR order after the Supreme Court's , already
reeling under a bruising tariff war and heavy spectrum dues payment
schedules.
The ruling has resulted in a Rs 92,000 crore liability
for India's telecom sector, Airtel and Vodafone Idea being the worst
hit and many of the others have shut operations since then.
Bharti
Airtel and Vodafone Idea, India's second- and third-biggest telecom
service providers, respectively, came out with unprecedented losses
largely a result of the two setting aside cash to pay disputed dues to
the government for AGR payment to government. Vodafone Idea's losses
ballooned to Rs 50,922 crore in the three months, from Rs 4,874 crore in
the year-ago period. Bharti Airtel's figure stood at Rs 23,044 crore
the biggest in its 24-year history. The company had earned profits of
Rs118 crore in the year-ago period.
Botyh telcos have already
said unless government gives them relief package, they would find it
extremely difficult to remain as going concern.
A Centre
appointed Secretaies Panel is looking into the possible bail out
packages in terms of lower rate of interest and moratoriums. It is yet
to take a final call on this. Last week Finance Minister Nirmala
Sitharaman said government does not want any telecom company to shut
down.
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