Good news came to the telecom sector on Wednesday, the central government has cleared the relief package for them. At the same time, more time has been given to pay spectrum purchased in the auction. The inter-ministerial group (IMG) had requested it, which the cabinet approved. IMG was requesting changes for the last ten years.
Explaining that around 4.6 lakh crore of dues of various financial institutions and banks are outstanding in the telecom sector. It is believed that there will be immediate impact of the changes now, which will help companies to get financial help.
These comprise restructuring of telecom service providers delayed payment liability and reconsideration of the edge of spectrum holding caps and spectrum. The steps are expected to uphold the cash flow for telecom operators swiftly, offering relief.
In the recommendations, operators were asked to increase the period of payment of spectrum purchased in the auction from ten years to 16 Years. There were many more such changes, for which more than eight meetings had been done in the last year.
Moreover, modifying the bound for spectrum holding will assist consolidation of telecom companies and might promote their contribution in upcoming auctions.
For this condition of the telecom sector, Reliance Jio has been accused by the old companies. It stated that Jio provided free data and voice, which directly damaged the overall business of the other players.
The telecom players have been taking an intense economic beating post entry of Mukesh Ambani’s Reliance Jio owing to the destructive plans for the user especially free data and calling. Reliance with its luring customer creating strategy now has Reliance Jio a huge database of potential users. This on the other side has decreased the number of users, resulting in a heavy loss in the business of telecom players and Reliance Jio dominance over the telecom market in India.