Photo: Mint
Photo: Mint

Opinion | Spare telcos, please

Under the law, these companies must pay up. Under the circumstances that prevail, most cannot afford to

The government has heard the telecom sector groan, it seems. It has constituted a Committee of Secretaries under the Cabinet Secretary to suggest how some of the sector’s pain may be alleviated. That pain is real. If huge volumes of debt taken on by telecom operators to buy airwaves in past auctions was not bad enough, they have watched their finances quake under the impact of last week’s Supreme Court ruling asking them to cough up a sum total of over 1.3 trillion (as estimated) to the government for their failure to pay fees they didn’t deem applicable all these years.

The judgement itself has become a matter of furious debate. But whether or not it’s fair that even the non-telecom revenues of these firms need to be shared with the government under the revenue-sharing regime in force (unclear wording in the original deal may be to blame), the fact is that the government’s claim to that money has been upheld by the top court. Under the law, these companies must pay up. Under the circumstances that prevail, most cannot afford to.

Since the blow was sudden, relief needs to be quick. It is unclear, however, whether the latest bill telecom firms have been saddled with would be addressed by the new committee, which has been charged with finding ways to relieve the sector of financial stress. Deferred payments for spectrum are not all telecom operators need. A waiver of at least the penalties and interest charges should not be considered too much of a give-away. There is little to suggest that these companies were trying to duck their payment commitments. That telecom revenues had to be shared was obvious all along; that this formula had to be applied to other revenues, too, was not.

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