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Airtel, Vodafone-Idea and Reliance Jio get relief of 42000 crores, 2 years rebate in spectrum installment

The government has announced a relief of Rs 42 thousand crore to the telecom companies. The cabinet has decided that companies will be given a two-year exemption on spectrum payments. This will give big relief to Airtel, Vodafone, Idea and Reliance Jio.

Rajkumar yadav

Big relief to telecom companies

Highlights

• Government has given two years exemption to telecom companies to pay spectrum
• With this, Voda-Idea, Airtel and Jio will get relief of 42 thousand crores
• Airtel and Vodafone Idea appealed to the government to waive penalty and interest
• These companies have debt of over seven lakh crore rupees

The New Delhi
government has announced a major relief to telecom companies. At a meeting of the Cabinet Committee on Economic Affairs on Wednesday, it was decided to give two years exemption on spectrum payments to telecom companies. Bharti Airtel , Vodafone Idea and Reliance Jio will get a relief of Rs 42,000 crore due to the postponement of spectrum payments for FY 2020-21 and 2021-22 .

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Giving information about the decisions taken in the meeting, Finance Nirmala Sitharaman said that in view of the problems being faced by the telecom companies, the cabinet decided to postpone payment of installments related to spectrum auction for two years. Sitharaman said that the deferred spectrum payment would be divided equally among the rest of the installments and there would be no increase in the existing time period. The finance minister said that telecom companies will have to pay fixed interest on deferred spectrum payments.

The Supreme Court also took the side of the government
Last month, the Supreme Court took the government's side in the AGR controversy. It had said that non-core revenue of telecom companies would also be included in its calculations. This increased the liability of companies to 92,642 crore in terms of license fees, penalty and interest till July 2019. At the same time, due to SUC, the burden of companies was increased by 55,054 crores by the end of October. On Wednesday, Voda Idea shares rose 17.5 per cent to close at Rs 7.07 on the BSE, while Airtel shares were down marginally by 0.46 per cent to Rs 437.25. Shares of Reliance Industries, the owner of Jio, rose 2.47 per cent to close at Rs 1,547.05.

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Companies had appealed to waive interest
Airtel and Vodafone Idea had appealed to the government to waive penalty and interest and also demanded more time to repay the principal amount. He also said that it should be exempted from payment for the first two years. The amount outstanding on Airtel, including the amount of penalty and interest, is 75 percent of the original dues. The two companies made provisioning (set aside money for payment) in the September quarter due to AGR, which led to a record loss of 51,000 crore to Voda Idea and 23,000 crore to Airtel.

The
Center had formed a committee headed by Cabinet Secretary Rajiv Gaba to consider measures to provide relief to telecom companies with a debt of over Rs 7 lakh crore . Apart from Gaba, the committee comprised the CEOs of the Department of Economic Affairs, Financial Affairs, Revenue, Corporate Affairs, Telecom, IT Secretaries and NITI Aayog.Telecom companies have been facing price war for three years and have a debt of over seven lakh crore rupees.