A Ministry source stated the government’s decision. It stated that the government formed a panel of bureaucrats to find ways to overcome financial pressures on the telecom sector. Thus, this decision came days after the court’s verdict to pay overdue government levies and interest.
Mobile operators in India seek support for a sector squeezed by a price war since late 2016. The high cost of using airwaves results in the Supreme Court decision last week. It upholds the request of the Telecommunications Department (DoT) for almost $13 billion overdue.
A panel of senior civil servants to consider the demands of the industry. Also, postponing the auction payments due for airwaves for 2020/21 and 2021/22, said the source.
The committee also looks at increasing airwave charges. Also, the government would fund contribution rates set up. This is to ensure that telecommunications services enter rural India in a non-discriminatory manner, the source added.
Government Formed a Panel for SC Verdict
Profits of Vodafone Idea and Bharti Airtel hit. Some rivals go out of business since Reliance Industries’ Jio Infocomm. They unleashed a fierce price war when free calling and cut-price data entered India’s crowded telecoms market in 2016.
Vodafone Idea said earlier that after the Supreme Court decision, it would request the federal government for relief on payments of at least $4 billion. Analysts said the charges might force the business out of business.
Rival Bharti Airtel said it had approached the DoT to “seek clarity”. They wanted to know the amount it had to pay. Also, it said it has sought the government’s support to deal with the “adverse outcome” of the court ruling.
It also postponed to November 14 the announcement of quarterly earnings scheduled for Tuesday.
Vodafone Idea shares closed down 8.3 percent, while Bharti Airtel lost 3.5 percent in a wider market with a gain of 1.4 percent.