: Major reforms announced for telecom sector #FinanceIndia #StockMarketNEWS Major reforms announced for telecom sector New Delhi, Sept 15 (KNN) The government has approved major reforms in the telecom
@stockMarketNEWS Thu 16 Sep, 2021
Major reforms announced for telecom sector #FinanceIndia #StockMarketNEWS
Major reforms announced for telecom sector New Delhi, Sept 15 (KNN) The government has approved major reforms in the telecom sector to boost employment, growth, competition and consumer interests and reduce the regulatory burden on Telecom Service Providers (TSPs).
The Union Cabinet, chaired by Prime Minister Narendra Modi on Wednesday approved a number of structural and process reforms in the Telecom sector, the government said in a statement.
These are expected to protect and generate employment opportunities, promote healthy competition, protect interests of consumers, infuse liquidity, encourage investment and reduce the regulatory burden on Telecom Service Providers (TSPs).
In the backdrop of the outstanding performance of the Telecom Sector in meeting COVID-19 challenges, with a 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.
The government approved nine structural reforms and five procedural reforms plus relief measures for the Telecom Service Providers.
--- Rationalization of Adjusted Gross Revenue: Non-telecom revenue will be excluded on prospective basis from the definition of AGR.
--- 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.
--- Interest rates rationalized/ Penalties removed: From 1st October, 2021, Delayed payments of License Fee (LF)/Spectrum Usage Charge (SUC) will attract an 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.
--- 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.
--- Spectrum Tenure: In future Auctions, tenure of spectrum increased from 20 to 30 years.
--- Surrender of spectrum will be permitted after 10 years for spectrum acquired in the future auctions.