Telecom Sector Crisis: DCC Okays TRAI's Recommendations, Decides Not to Cut Spectrum Prices
Days after Vodafone-Idea Chairman Kumar Mangalam Birla said that he would consider shutting the telecom company, DCC not to cut spectrum prices in line with the recommendation from TRAI.
New Delhi, December 20: Days after Vodafone-Idea Chairman Kumar Mangalam Birla said that he would consider shutting the telecom company if the government doesn't provide a relief of Rs 32,000 crore of input tax credit that it has sought, reports are arriving that Digital Communications Committee (DCC) not to cut spectrum prices in line with the recommendation from the Telecom Regulatory Authority of India (TRAI).
According to a report, published by CNBC-TV18, in the meeting of DCC -- which took place on Friday -- a decision was taken not to cut spectrum prices after telecom companies' requested to DCC and Department of Telecommunications (DoT). Following this, the DoT had then referred the issue back to TRAI. Report states that the DCC has taken the recommendations of TRAI would be considered and there will be no cut in spectrum prices. Vodafone-Idea Chairman Kumar Mangalam Birla Warns Centre of Business Closure in India, Says 'Will Have to Shut Shop if No Govt Relief'.
Earlier, Union Minister of Communications and Electronics and Information Technology -- Ravi Shankar Prasad looked confident that the spectrum auctions will be conducted within this financial year only. However, the possibility looks bleak and spectrum auctions might take place in May 2020.
Apart from Vodafone-Idea's Kumar Mangalam Birla, chairman of Bharti Airtel, Sunil Mittal had said that the telecom industry is passing through the most difficult period in the last 25 years and needs government help to pass through this phase. Like Birla, he had blamed teh adjusted gross revenue (ADR) judgment of the Supreme Court on October 24 and sought relief on the AGR dues demanded by the government.
Birla had claimed shutting his telecom business after declaring a net loss of Rs 50,921 crore for the second quarter -- ended September 2019. He had sought a relief of Rs 32,000 crore of input tax credit from the Union government, failing which, he said, he would consider shutting the telecom company. Sunil Mittal of Bharti Airtel Rings Alarm Bell: 'Telecom Industry Passing Through Its Worst Phase in 25 Years, Needs Immediate Government Help'.
It is to be known that after the apex court judgement -- which upheld Telecom Ministry's demand that wireless carriers pay overdue levies and interest -- Vodafone-Idea suffered a loss of 1.9 billion euro group in its first half. Following this, the company’s revenue from operations plunged to Rs 10,844 crore from Rs 22,114 crore YoY during the second quarter. As a result, Vodafone-Idea has been seeking a two-year moratorium on its annual spectrum payment from the court.
(The above story first appeared on LatestLY on Dec 20, 2019 04:12 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).