Telecom Quick-Fix: Relief On Dues Will Help Players Survive

The Centre’s decision to give a two-year moratorium to telecom operators on pending spectrum payment is a welcome move, given the financial stress being faced by them. Having a financially strong telecom industry, one that is capable of operating a world-class communication network, is key to securing India’s digital future. The moratorium in payments will help telecom companies avoid an immediate outflow of over ₹42,000 crore.

Players such as Vodafone Idea will be able to tide over immediate liquidity crunch and stay operational. However, the moratorium alone is not a long-term solution. The operators still have to pay the spectrum dues at the end of the two-year period.

The telecom operators collectively have debts of over ₹4 lakh crore. The recent Supreme Court ruling on Adjusted Gross Revenue has plunged the telecom sector further into a financial mess as incumbent operators stare at an additional payout of nearly ₹1.3 lakh crore of dues to the national exchequer. As a result, telecom operators reported combined losses of ₹79,000 crore in the second quarter. – The Hindu BusinessLine