Lok Sabha Question No. 609 (UNSTARRED), answered on 2021-12-01
Subject: Telecom Service Providers
Ministry: COMMUNICATIONS
Asked by: Sukanta Majumdar

## GOVERNMENT OF INDIA MINISTRY OF COMMUNICATIONS DEPARTMENT OF TELECOMMUNICATIONS

## LOK SABHA UNSTARRED QUESTION NO. 609 TO BE ANSWERED ON 1 ST  DECEMBER, 2021

## TELECOM SERVICE PROVIDERS

609. DR. SUKANTA MAJUMDAR: DR. JAYANTA KUMAR ROY: SHRI BHOLA SINGH: SHRI RAJA AMARESHWARA NAIK: SHRI VINOD KUMAR SONKAR:

Will the Minister of COMMUNICATIONS be pleased to state:

- (a) whether  the  Government  has  approved  number  of  structural  and  process  reforms  to address  the  liquidity  needs  of  Telecom  Service  Providers  in  the  country  and  if  so,  the  details thereof;
- (b) whether the Government has a fixed auction calendar and the spectrum auctions to be held accordingly every year;
- (c) if so, the details thereof;
- (d) whether  the  Government  has  rationalized  Adjusted  Gross  Revenue  (AGR)  and  Bank Guarantees (BGs);
- (e) if so, the details thereof;
- (f) whether the Government has discontinued the practices of BGs in forthcoming Auctions and Spectrum Usage Charge (SUC) in future spectrum auctions of Telecom sector;
- (g) if so, the details thereof; and
- (h) the  other  steps  being  taken  by  the  Government  to  boost  4G  proliferation  to  infuse liquidity?

## ANSWER

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

- (a) to  (g) The Government has approved a number of structural and process reforms to address the  liquidity  needs  of  Telecom  Service  Providers  (TSPs)  in  the  country.  The  important  decisions taken in this regard, inter-alia, are:

- (i) The Government has amended the License Agreements to exclude non-telecom revenue from Adjusted Gross Revenue (AGR).
- (ii) 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.
- (iii) 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.
- (iv) Spectrum auctions will be held normally in the last quarter of every financial year. Whenever necessary, auctions can be held at shorter intervals also.
- (v) For spectrum auctions held henceforth, TSPs will not be required to submit Bank Guarantees (BGs) to securitize spectrum auction instalment payments.
- (vi) There will be no Spectrum Usage Charge (SUC) for spectrum acquired in future spectrum auctions.
- (vii) 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.
- (viii) 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.
- (ix) 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.
- (x) To encourage investment, 100% Foreign Direct Investment (FDI) under automatic route has been permitted in the Telecom Sector.

(h) The above decisions will create an enabling environment for further investment to boost 4G proliferation in the country.

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