NEW DELHI:In a big relief to stressed telecom firms, burdened with a cumulative debt of over Rs 4.6 lakh crore, the Union Cabinet on Wednesday allowed operators more time to pay for the spectrum they bought in auctions. The government also relaxed the overall spectrum holding cap from 25 per cent to 35 per cent.
Telcos can now opt for making spectrum payments through 16 instalments instead of 12 earlier.
Enhancing the cap will help telcos such as Vodafone and Idea - soon to be a single entity - as they will breach the spectrum cap in some circles under current norms.The development comes in the wake of recommendations by an inter-ministerial group constituted to look into the matter.
The debt-laden sector, whose woes accentuated with the entry of disruptive player Reliance Jio, has been beseeching the government for a relief package.The government said the move is aimed at facilitating investments and consolidation in the sector. “The cash flow for telecom service providers will be increased in the immediate time frame providing them some relief,” a government release said.