Govt set to waive spectrum utilization payment, CFO Information, ETCFO

NEW DELHI: Govt is ready to provide a significant aid to telecom firms – operating into 1000’s of crores of rupees – by waiving off spectrum utilization expenses (SUC) on airwaves purchased via auctions earlier than Sept 2021.

The measure will assist firms, reminiscent of Vodafone Concept, Airtel and Reliance Jio preserve money as they develop 5G providers and proceed the work to spice up telecom community, an official supply advised TOI.

In June 2022, govt had determined to take away SUC for bandwidth that had been auctioned after Sept 15, 2021 throughout totally different frequencies. Nevertheless, no resolution was taken for spectrum purchased via auctions earlier than this era.

“The transfer to waive off SUC for spectrum purchased via auctions earlier than 2022 is more likely to be accredited quickly. The plan is to provide aid to the telecom firms in order that their community enlargement work continues strongly,” the supply mentioned.

It was felt {that a} aggressive bidding course of, which went aggressive on many events, had already helped the exchequer get the most effective costs for airwaves and thus there was no have to tax firms extra for spectrum.

Aside from SUC payout, which ranges round 3-4% of adjusted gross income (AGR) of firms, telecom operators pay an 8% licence payment to govt, together with 5% in direction of Common Service Obligation Fund (USOF).

“The matter has already been mentioned inside DoT and related ministries and an announcement on the waiver can come quickly,” the supply mentioned.

One of many largest beneficiaries of the transfer is more likely to be Vodafone Concept, which is at present beneath a debt pile in extra of Rs 2 lakh crore. “It’s believed that the corporate could get a advantage of round Rs 8,000 crore,” the supply mentioned.

The waiver additionally comes at a time when the native firms put together for entry of Elon Musk within the telecom sector via Starlink’s Rs 2-lakh-crore enterprise. Curiously, whereas native firms will see SUC obligations being waived off utterly, Starlink might want to pay tax on its spectrum, the supply mentioned.

“The explanation for Starlink and different satellite tv for pc operators being requested for SUC is that they are going to get the spectrum on an administrative foundation as an alternative of aggressive auctions. The pondering is obvious that any firm getting spectrum via govt allocation at a pre-determined worth might want to pay tax on the spectrum,” the supply mentioned.

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