Telecom package unveiled

NEW DELHI, JULY 14: Telecom Secretary Anil Kumar today formally presented the Government approved telecom package to private telecom comp...

NEW DELHI, JULY 14: Telecom Secretary Anil Kumar today formally presented the Government approved telecom package to private telecom companies. The package had been formally approved by the Cabinet last week. The package allows financially beleaguered private telecom companies to migrate to a revenue sharing arrangement instead of the original licence fee system from August 1. This, however, would be allowed only if operators withdrew all the litigations and arbitrations related to the licence agreement before August 1.

Anil Kumar also said that the Department of Telecommunications DoT would send a formal letter to all operators containing the details of the package discussed with the operators today. He said operators would be required to respond to this within a week to 10 days giving their decision whether the package was acceptable to them.

Anil Kumar told the operators that the Government had decided to accommodate the existing private operators into the new telecom policy subject to certainconditions and that the operators would not be given the option of accepting the package in parts.

The contentious issue of the quantum of revenue to be shared with the Government would be worked out by the month-end to enable cellular and basic operators to function in the revenue share pattern from the beginning of August. This comes as a surprise as the Government had earlier given indications that the interim revenue share as 15 per cent of the gross revenue of operators till such time that the Government announces a final figure after receiving recommendations from the Telecom Regulatory Authority of India TRAI.

All the companies opting for the new dispensation would have to pay 15 per cent of the existing dues by August 15 taking the total arrears cleared by this date to 35 per cent. The payment will have to include interest charges on the dues chalked up by companies as well as liquidated damages for delays in rolling out their networks.

The entire backlog of licence fee should to be cleared byJanuary 31. The operators were told that they would be given extension in the effective date of licence fee so that some amount of dues can be waived off as a relief measure to the struggling operators totalling nearly Rs 1,443 crore for the entire industry. However, the companies which have already been given such an extension beyond six months would not be considered for similar concessions and those who have got less than six months would be given only the remaining.

The companies were also told that they could not sell their equity holdings in the company from the present level till the completion of five-year period from the effective date of licence agreement. However, they would be allowed to bring in fresh equity for making the projects viable. Operators who are opting for the new package would also be given an extension in the period of licence agreement from the existing 10 years to 20 years. The companies would have to enter into a supplementary agreement to enable them to move to the newsystem and am affidavit accepting the package.

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Operators were also informed that migration would be allowed only if both operators decided to move over to the new package. He requested all to switch over for a healthy growth of the telecom industry in the country. Kumar described the meeting as a significant step towards implementation of the Government decision and said today8217;s meeting served as an opportunity for useful interaction with the Government.