Government could soon come up with a proposal to provide relief to telecom companies

An extension of the moratorium on spectrum payments along with reduction in spectrum usage charge (SUC) are some of the measures being considered to reduce the stress on telecom companies.

The government is believed to have discussed the proposal to defer spectrum payments and thereafter convert part of the interest dues of telecom companies into equity in order to maintain the net present value of the outstanding, according to a report in Times of India.

The proposal could come up before the Cabinet soon as the Centre is keen to maintain a healthy competition in the telecom sector and avoid a duopoly.


Moreover, failure of Vodafone Idea could cause huge losses to the exchequer and lenders who have exposure to the company.

According to a report in ETTelecom, the government is also considering to acquire a small stake in Vodafone Idea in order to ease concerns of investors and stakeholders.

Vodafone Idea owes Rs 1.6 lakh crore towards AGR and spectrum payments to the government.

“Deferment in payment of AGR dues and spectrum auction should considerably help the operational profitability of the company. If in four years' time, the company is able to improve its operational performance but is being dragged only due to the payment of these dues, then the government could step in and convert a part of the dues into equity," the report quoted an official as saying.