(LiveMint)
The government on Wednesday approved a relief package for the stressed telecom sector, easing spectrum-holding caps and extending the payment period for spectrum acquired in auctions to 16 years from 10 years. While the change in spectrum caps is expected to aid telecom sector consolidation, allowing operators to settle their dues to the government over a longer time period will boost cash flows of operators.
The earnings of telecom operators, grappling with a heavy debt load, have come under further pressure following the entry of Reliance Jio Infocomm Ltd in September 2016. The Mukesh Ambani-controlled company disrupted the telecom sector first through free services and later through ultra-cheap data tariffs, triggering a wave of telecom sector consolidation.
The cabinet approved raising the overall spectrum cap per operator in a telecom circle to 35% from the current 25%. It also scrapped a rule that restricted operators from holding more than 50% spectrum in a single band in a circle. The new norms have set a cap of 50% on the combined spectrum holding in the sub-l GHz bands in a circle.
