Govt dismisses Oppn charges on telecom

The bail-out package was announced on July 6 allowing private telecom operators to switch over from licensing regime to revenue sharing system as provided in the new telecom policy.

In a seven-point counter to the Opposition charges, the PMO said without the new package financial closure would not have been possible for these telecom companies and the projected revenues based on licensing conditions would not have been generated from the sector.

Listing out the rationale behind the package, the PMO said the new revenue sharing arrangement was coupled with greater market deregulation through multiple licensing regime.

It said financial institutions had about Rs 10,000 crore commitment in the sector and any failure to implement the package would lead to substantial part of the fund becoming non-performing assets.

The PMO conceded that a change in effective date in license agreements for six months granted to telecom operators would have financial implications of only Rs 1,400 crore.

On the allegations that the Government would have to forego Rs 1,700 crore for which credit had been taken in the last budget, it said that calculations suggested that the Government would in fact be able to secure much more from the sector.

Elaborating on the calculations, the PMO said that while 35 per cent of the license telecom fee dues would be paid by August 15, the balance would also be realised before January 31, 2000.

Besides, the revenue sharing regime from August 1 would also generate additional revenue. All this put together would be in excess of Rs 1,700 crore.

On the allegation that Attorney General Soli Sorabjee had given two contradictory opinions on the issue, the PMO said the AG himself had clarified that there was no contradiction in his opinions.

"In the interest of transparency, the Government has decided to make public AG’s opinion, in which he had suggested the transition to the new policy only from a prospective date while fully realising the dues and arrears," he said.

The Government said the shift to revenue share arrangement from a prospective date was in consonance with the best international practices and was recognised world over as a system that generates buoyancy in telecom sector.