The Cellular Operators Association of India (COAI) has urged the government to ease the terms for payment of statutory dues by telecom companies. COAI Director General has written a letter to the Telecom Secretary Anshu Prakash highlighting the crisis in the telecom industry.
Crux of the Matter
Banking the Trust According to COAI, India has a low average revenue per user compared to other global markets along with one of the cheapest data prices. COAI is asking for the extension of loans at lower rates to cover AGR liabilities along with the fast implementation of floor prices to help the loss-making sector.
COAI has requested for an immediate cut in license fee to 3% from 8% and subsequent reduction in spectrum usage charges. Different associations have raised an alarm over banks’ unwillingness to take any risk with regard to this sector.
Banks are currently unwilling to take any risk with respect to the telecom sector and are constantly asking telecom service providers to reduce their exposures by refusing to issue new bank guarantees or even to renew bank guarantees. – Rajan Mathews, COAI Director General
COAI wants removal of the requirement of bank guarantees for securing license fee payments and in case required it should be reduced to one-quarter of license fee only. The telecom sector wants the government to give a clear message to banks that the government is there to support the sector.
Crisis for Companies Vodafone Idea also said that they have made it clear to the government that ‘it won’t be able to pay court-mandated AGR dues in entirety unless a bailout is extended immediately.’ Earlier in February, the Supreme Court rejected a plea by telcos such as Bharti Airtel and Vodafone Idea for extension in the payment schedule and asked companies to deposit their past dues. After the Supreme Court judgment on AGR in October 2019, 15 telecom entities are liable to pay the government Rs 1.47 lakh crore for unpaid statutory dues. Airtel and Vodafone Idea account for about 60% of the amount.
Curiopedia
The Cellular Operators Association of India is an industry association of mobile service providers, telecom equipment, internet services providers and other digital technologies’ companies and businesses in India. COAI was constituted in 1995 as a registered, non-governmental society. Over the years it has emerged as the official voice for the Indian telecom industry and interacts directly with Ministries, Policy Makers, Regulators, Financial Institutions and Technical Bodies. It provides a forum for discussion and exchange of ideas between these bodies and the Service Providers, who share a common interest in the development of mobile telephony in the country. COAI collaborates with other Industry Associations such as CII, FICCI, ASSOCHAM, ISPAI, VSAT, IAMAI association etc. More Info
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