Lok Sabha Question No. 658 (UNSTARRED), answered on 2021-12-01
Subject: Liquidity Needs of Telecom Service Providers
Ministry: COMMUNICATIONS
Asked by: Jayanta Kumar Roy, Raja Amareshwara Naik, Vinod Kumar Sonkar

## GOVERNMENT OF INDIA MINISTRY OF COMMUNICATIONS DEPARTMENT OF TELECOMMUNICATIONS

## LOK SABHA UNSTARRED QUESTION NO. 658 TO BE ANSWERED ON 1 ST  DECEMBER, 2021

## INVESTMENT IN 5G NETWORK

## 658.  DR. JAYANTA KUMAR ROY SHRI: BHOLA SINGH SHRI: RAJA AMARESHWARA NAIK

Will the Minister of COMMUNICATIONS be pleased to state:

(a) whether the Government has created/proposes to create an enabling environment for investment in 5G network in the country and;

- (b) if so, the details thereof ?

## ANSWER

## MINISTER OF STATE FOR COMMUNICATIONS (SHRI DEVUSINH CHAUHAN)

(a) &  (b)  The  Government  has  created  an  enabling  environment  for  investment  in  5G network in the country as follows:

- (i) The  Government  has  approved  a  number  of  structural  and  process  reforms  to address  the  liquidity  needs  of  Telecom  Service  Providers  (TSPs)  which  will facilitate investments in 5G networks. The important decisions taken in this regard, inter-alia, are:
- (a) The  Government  has  amended  the  License  Agreements  to  exclude  nontelecom revenue from Adjusted Gross Revenue (AGR).
- (b) The Government has reduced the Financial Bank Guarantee (FBG) requirement against License Fee (LF) and other dues not otherwise securitized,  as  well  as  Performance  Bank  Guarantees  (PBGs),  to  20%  of current stipulated requirement.
- (c) The Government has rationalized the interest rate on delayed payments by TSPs.  Any  delayed  payments  of  License  Fee  (LF)  and  Spectrum  Usage Charge (SUC) will attract interest at the rate of State Bank of India (SBI) Marginal Cost of Lending Rate (MCLR) plus 2%, instead of hitherto MCLR

plus 4%. Further, the penalty for shortfall in payment of LF and SUC dues by TSPs has been removed.

- (d) For spectrum auctions held henceforth, TSPs will not be required to submit Bank Guarantees (BGs) to securitize spectrum auction instalment payments.
- (e) There will be no Spectrum Usage Charge (SUC) for spectrum acquired in future spectrum auctions.
- (f) The Government has given moratorium of four years for annual payments of dues  arising  out  of  the  Hon'ble  Supreme  Court  (SC)  AGR  judgement. However,  the  Net  Present  Value  (NPV)  of  the  due  amounts  has  been protected.
- (g) The  Government  has  given  moratorium  on  payments  of  instalments  in respect  of  spectrum  purchased  in  past  auctions  (excluding  the  auction  of 2021) for upto four years, with NPV protected at the interest rate stipulated in the respective auctions.
- (h) Option has been given to the TSPs to pay the interest amount arising due to the deferment of payment of AGR dues and spectrum auction instalments, by way of equity.
- (i) To  encourage  investment,  100%  Foreign  Direct  Investment  (FDI)  under automatic route has been permitted in the Telecom Sector.
- (ii) The Government has assigned 5G spectrum for experimental/ trial purposes.
- (iii) The Government has notified a Production Linked Incentive (PLI) Scheme with financial outlay of Rs. 12,195  cr. over five years,  to  promote manufacturing of telecom and networking products, including 5G products, in India.

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