Cabinet approves major Reforms in Telecom Sector

Published By : Admin | September 15, 2021 | 21:22 IST

The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, today approved a number of structural and process reforms in the Telecom sector. These are expected to protect and generate employment opportunities, promote healthy competition, protect interests of consumers, infuse liquidity, encourage investment and reduce regulatory burden on Telecom Service Providers (TSPs).

In the backdrop of the outstanding performance of the Telecom Sector in meeting COVID-19 challenges, with huge surge in data consumption, online education, work from home, interpersonal connect through social media, virtual meetings etc., the Reform measures will further boost the proliferation and penetration of broadband and telecom connectivity. The Cabinet decision reinforces the Prime Minister’s vision of a robust Telecom Sector. With competition and customer choice, antyodaya for inclusive development and bringing the marginalized areas into the mainstream and universal broadband access to connect the unconnected. The package is also expected to boost 4G proliferation, infuse liquidity and create an enabling environment for investment in 5G networks.

Nine structural reforms and Five procedural reforms plus relief measures for the Telecom Service Providers are as below:

Structural Reforms

  1. Rationalization of Adjusted Gross Revenue:  Non-telecom revenue will be excluded on prospective basis from the definition of AGR.
  2. Bank Guarantees (BGs) rationalized: Huge reduction in BG requirements (80%) against License Fee (LF) and other similar Levies. No requirements for multiple BGs in different Licenced Service Areas (LSAs) regions in the country. Instead, One BG will be enough.
  3. Interest rates rationalized/ Penalties removed: From 1st October, 2021, Delayed payments of License Fee (LF)/Spectrum Usage Charge (SUC) will attract interest rate of SBI’s MCLR plus 2% instead of MCLR plus 4%; interest compounded annually instead of monthly; penalty and interest on penalty removed.
  4. For Auctions held henceforth, no BGs will be required to secure instalment payments. Industry has matured and the past practice of BG is no longer required. 
  5. Spectrum Tenure: In future Auctions, tenure of spectrum increased from 20 to 30 years.
  6. Surrender of spectrum will be permitted after 10 years for spectrum acquired in the future auctions.
  7. No Spectrum Usage Charge (SUC) for spectrum acquired in future spectrum auctions.
  8. Spectrum sharing encouraged- additional SUC of 0.5% for spectrum sharing removed.
  9. To encourage investment, 100% Foreign Direct Investment (FDI) under automatic route permitted in Telecom Sector. All safeguards will apply.

Procedural Reforms

  1. Auction calendar fixed - Spectrum auctions to be normally held in the last quarter of every financial year.
  2. Ease of doing business promoted - cumbersome requirement of licenses under 1953 Customs Notification for wireless equipment removed. Replaced with self-declaration.
  3. Know Your Customers (KYC) reforms: Self-KYC (App based) permitted. E-KYC rate revised to only One Rupee. Shifting from Prepaid to Post-paid and vice-versa will not require fresh KYC.
  4. Paper Customer Acquisition Forms (CAF) will be replaced by digital storage of data. Nearly 300-400 crore paper CAFs lying in various warehouses of TSPs will not be required. Warehouse audit of CAF will not be required.
  5. SACFA clearance for telecom towers eased. DOT will accept data on a portal based on self-declaration basis. Portals of other Agencies (such as Civil Aviation) will be linked with DOT Portal.

Addressing Liquidity requirements of Telecom Service Providers

The Cabinet approved the following for all the Telecom Service Providers (TSPs):

  1. Moratorium/Deferment of upto four years in annual payments of dues arising out of the AGR judgement, with however,  by protecting the Net Present Value (NPV) of the due amounts being protected.
  2. Moratorium/Deferment on due payments 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.
  3. Option to the TSPs to pay the interest amount arising due to the said deferment of payment by way of equity.
  4. At the option of the Government, to convert the due amount pertaining to the said deferred payment by way of equity at the end of the Moratorium/Deferment period, guidelines for which will be finalized by the Ministry of Finance.

The above will be applicable for all TSPs and will provide relief by easing liquidity and cash flow. This will also help various banks having substantial exposure to the Telecom sector.

Explore More
77ਵੇਂ ਸੁਤੰਤਰਤਾ ਦਿਵਸ ਦੇ ਅਵਸਰ ’ਤੇ ਲਾਲ ਕਿਲੇ ਦੀ ਫ਼ਸੀਲ ਤੋਂ ਪ੍ਰਧਾਨ ਮੰਤਰੀ, ਸ਼੍ਰੀ ਨਰੇਂਦਰ ਮੋਦੀ ਦੇ ਸੰਬੋਧਨ ਦਾ ਮੂਲ-ਪਾਠ

Popular Speeches

77ਵੇਂ ਸੁਤੰਤਰਤਾ ਦਿਵਸ ਦੇ ਅਵਸਰ ’ਤੇ ਲਾਲ ਕਿਲੇ ਦੀ ਫ਼ਸੀਲ ਤੋਂ ਪ੍ਰਧਾਨ ਮੰਤਰੀ, ਸ਼੍ਰੀ ਨਰੇਂਦਰ ਮੋਦੀ ਦੇ ਸੰਬੋਧਨ ਦਾ ਮੂਲ-ਪਾਠ
India's pharma exports rise 10% to USD 27.9 bn in FY24

Media Coverage

India's pharma exports rise 10% to USD 27.9 bn in FY24
NM on the go

Nm on the go

Always be the first to hear from the PM. Get the App Now!
...
Morena extends a grand welcome to PM Modi as he speaks at a Vijay Sankalp rally in MP
April 25, 2024
Nothing is greater than the country for BJP. But for Congress, it is family first: PM Modi in Morena
Congress did not allow the demands of army personnel like One Rank-One Pension to be fulfilled. We implemented OROP as soon as the govt was formed: PM
If Congress comes to power, it will snatch more than half of your earnings through inheritance tax: PM Modi
Congress is indulging in different games to get the chair anyhow by playing with the future of people: PM Modi in Morena

The momentum in Lok Sabha election campaigning escalates as the NDA's leading campaigner, Prime Minister Narendra Modi, ramps up his efforts ahead of the second phase. Today, PM Modi addressed an enthusiastic crowd in Madhya Pradesh’s Morena. He declared that the people of Madhya Pradesh know that once they get entangled in a problem, it's best to keep their distance from it. “The Congress party represents such an obstacle to development. During that time, Congress had pushed MP to the back of the line among the nation's BIMARU states,” the PM said.

Slamming the Congress for keeping those who contribute the most to the nation at the back, PM Modi asserted, “For the BJP, there is nothing bigger than the nation, while for the Congress, their own family is everything. Hence, the Congress government for so many years did not fulfill demands like One Rank One Pension (OROP) for soldiers. As soon as we formed the government, we implemented OROP. We also addressed the concerns of soldiers standing at the border and we have asked our jawans to fire ten bullets in reply to one.”

Training guns at Congress Party, PM Modi said, “As you all know, during the time of independence, the Congress accepted the division of the country in the name of religion to gain power. Today, once again, the Congress is scrambling for power. These people are once again using religious appeasement as a political tool. But Modi is standing as a wall between you and Congress' plans to loot you.”

Furthermore, he said, “The Congress has been conspiring to deprive Dalits, backward classes, and tribals of their rights for a long time. In Karnataka, the Congress government has essentially declared the entire Muslim community as OBCs. This means that the Congress has begun to give reservation to the Muslim community in education and government jobs by taking it away from the OBCs. The Constitution of the country does not allow reservation based on religion, so Congress has resorted to this deceit. Even Dr. B.R. Ambedkar himself was strongly against reservation based on religion. However, drowning in vote banks and appeasement, the Congress wants to implement this model of Karnataka across the entire country.”

The PM came out all guns blazing against Congress’s appeasement politics. He reminisced, “Back in 2014, the Congress stated in its manifesto that, if necessary, they would even enact a law to provide reservation based on religion. At that time, the country ousted the Congress from power, but now they are talking about completing this unfinished task. If the Congress comes to power here in MP, they will snatch the share of reservation from our Kushwaha, Gurjar, Yadav, Gadaria, and Dhakad Prajapati communities, as well as from our Kumhar, Teli, Manjhi, Nai, and Sonar communities, to give it to their favored vote bank. Will the people of MP allow this to happen?”

“According to the Congress, they would even provide the benefits of poverty alleviation schemes based on religion. Because the Congress bluntly states that Muslims have the first right on the country's resources,” he added.

Accusing the Congress’s Shehzaade of hatching a deep conspiracy, PM Modi remarked, “One of the Congress leaders is talking about conducting an X-ray of people's assets across the country. Whatever you earn, the Mangalsutra, gold, and silver that our mothers and sisters have, Congress wants to seize it and distribute it among their vote bank supporters. Even the wealth left after you leave this world won't go to your sons and daughters. Congress wants to snatch more than half of your earnings. For this, Congress wants to impose an Inheritance tax on you.”

In a scathing critique of the Congress's proposal to impose an Inheritance tax, PM Modi said, “When Mrs. Indira Gandhi passed away, her property was supposed to go to her children. If there had been the previous law, the government would have taken a portion of it. At that time, there was talk that, in order to save their property, her son and the then Prime Minister simply abolished the inheritance law. When it came to their own interests, they removed the law. Today, driven by the greed for power once again, these people want to reintroduce the same law. After accumulating limitless wealth for generations without taxes on their families, now they want to impose taxes on your inheritance. That's why the country is saying – ‘Congress ki loot – Jindagi ke saath bhi, jindagi ke baad bhi’.”

PM Modi urged that the stronger the voter turnout on May 7th, the stronger Modi will be. “I have one more request: please go door-to-door, convey my regards to the people, and inspire them to vote,” he said.