Subhash Chandra Garg Suggests One-Time Settlement For Telecom Firms
The massive Rs 1.47 lakh crore of adjusted gross revenue dues is pushing telecom firms to the brink.
Former finance secretary Subhash Chandra Garg on Wednesday said the government should offer a one-time settlement scheme to the telecom companies to pay the principal due amount as per the adjusted gross revenue definition and waive the penal interest and penalties.
The massive Rs 1.47 lakh crore of adjusted gross revenue dues is pushing telecom firms to the brink. In a blog titled ‘Rebuilding Telecom Business in India’, Garg said the telecom crisis in India is not just limited to AGR-related issues.
"Offer a one-time settlement scheme to the telecom companies (both operating and under resolution) to pay the principal due amount as per the AGR definition as contained in the licensing agreements and waive the penal interest and penalties.
"Alternatively, appoint a board for Vodafone Idea Ltd by ousting the current board on the lines of action taken in the case of Infrastructure Leasing & Financial Services and Dewan Housing Finance Ltd. and secure a moratorium of some time on servicing of loans and government dues," he said.
Garg noted that the telecom business -- both voice and data -- is headed towards becoming a duopoly (Reliance Jio Infocomm Ltd. and Bharti Airtel Ltd) with the remaining two players, Vodafone Idea and Bharat Sanchar Nigam Ltd.-Mahanagar Telephone Nigam Ltd., hurtling towards eventual shutdown, which might as well be an abrupt collapse.
"This has enormous consequences for over 400 million of the customers of Vodafone Idea and BSNL-MTNL in terms of continuous availability of telecom services and also for competitiveness in the industry itself," he said. Garg also wondered whether the government's proposal to put in billions of dollars (over Rs 70,000 crore) to revive BSNL-MTNL is advisable or not as the country is facing a massive economic slowdown.
The Supreme Court last week rejected a plea by telecom firms including Bharti Airtel and Vodafone Idea Ltd for extension in the payment schedule and asked them to deposit an estimated Rs 1.47 lakh crore in past dues for spectrum and licenses by March 17. Some telecom firms have said they were already struggling with mounting losses and debt and the additional liability has raised concerns of them defaulting on existing loans.