Telecom operators have approached the government seeking help in sustaining their businesses. The Cellular Operators Association of India (COAI) has written to the telecom department asking for measures to ensure financial viability of their businesses.

The COAI has written to Telecom Secretary Anshu Prakash, amid an existential struggle of mobile operator Vodafone Idea in a three-private player market.

SP Kochhar, Director General of COAI said, “We have been writing to Department of Telecommunications (DoT) for some time. We have been asking for help from the government, to pull us out of the financial stress that the telecom sector is in.

The weak financials of the telecom sector are very well known to everyone. So it is a no-brainer that we require support, our revenues are bleeding and we have not seen too much support from the regulator and the policymakers. We have repeated and highlighted the current levels of stress, and what are measures can be taken by them to help us out of this situation.”

In a letter, COAI proposed a reduction in taxes and levies, increased tenure, reasonable reserve prices, and easier payment terms for auctioned spectrum. The industry has also batted for a reduction in interest rate for deferred payment liability, review of AGR definition, fixing of a floor price, waiver of financial and performance bank guarantees among others.

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Kochhar said, “These are issues we have been taking up with the government in piecemeal over the last few years and we have been engaged with them."

The solution consists of two buckets if you see them carefully, he said. One is the indirect intervention of the government. They can reduce their collections and help the telecom sector. The second is indirect, where things that have become outdated or no longer required, those be removed or reduced to the barest minimum, Kochhar elaborated.

“It would be improper for me to say that we expect to answer so fast. The decision will take some time, there will be deliberation at the government level before they even respond to this. So let us wait,” he said.

The government could also direct intervene by reducing spectrum prices. “Direct intervention would be reducing the spectrum price, those are very high. We are saying that now with 5G around the corner, it is necessary for them to look at the spectrum cost at the minimum support price differentially. It is not like 4G or 5G coming, it is becoming an enabler for all other sectors.

Hence, the government must look at this as an enabling sector and enabling technology without which other sectors will be hard-pressed to produce to the optimum. So, therefore, they have to look at a different formula.”

In terms of relief measures from the government Kochhar said, “There is nothing new in that sense but yes, we are saying that they must understand the urgency of this entire thing. Some of the things that DoT can do themselves, some of them, they have to go to other ministries, to finance ministry, to the revenue guys, and then take a call. Those are the things that will have to be now acted upon extremely fast.

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We are also looking at, you know, floor pricing, we are urging TRAI that you take a decision on this, because this is something that will at least give us sustainability to some extent, and they must make a decision on this.”

He added, “Many people ask me that they have rejected it. I would like to defer that. They haven't rejected it as yet. They haven't accepted it as yet. So it is under consideration. So hopefully some decision will come on this.”

For full interview, watch the accompanying video.