New Delhi: In a relief to Vodafone and Airtel, who recently faced astronomical penalties based on a Supreme Court verdict that threw the Telecom Sector into chaos, the Union Cabinet chaired by Prime Minister Narendra Modi on 20 November approved a proposal for mitigating financial stress being faced by the Telecom Services Sector as per the following:
Department of Telecommunication will give an option to the Telecom Service Providers (TSPs) to defer payment of the spectrum auction installments due for 2020-21 & 2021-22, either for one or both years.
These deferred amounts will be spread equally in the remaining installments to be paid by TSPs. Interest as stipulated while auctioning of the concerned spectrum will however be charged so that net present value (NPV) is protected.
Deferment of spectrum auction installments will ease the cash outflow of stressed TSPs and facilitate payment of statutory liabilities and interest on bank loans.
Continued operation by TSPs will give a fillip to employment and economic growth, while improved financial health of TSPs will facilitate maintenance of quality of services to consumer, said the Cabinet in a release.
The decision for deferring spectrum payment installments for two years will be implemented within a fortnight. Amendment to the License shall be issued expeditiously with the approval of the Minister of Communications.
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