Centre may set up panel for telecom sector relief package

The Centre may appoint an external consultant or institute a panel to finalise financial relief to the troubled telecom sector.

The Department of Telecommunications (DoT) is likely to consult an external agency for the revival package, expected to provide relief to the telecom sector in addition to being a lifeline for the beleaguered Vodafone Idea which is struggling to stay afloat.

"Consultations with these bodies help us evaluate the options better," a source told Business Standard. The Centre had sought remarks from the Indian Institute of Management (IIM) Ahmedabad and Deloitte at the time of bringing the relief package for Bharat Sanchar Nigam Ltd. (BSNL).

Also Read: DoT initiates talks with banks to address financial stress in telecom sector

The process to invite such observations is by seeking suggestions from these organisations in addition to their respective reports on the subject. Following this, the ideas are then considered by the government. Other possibility the DoT can weigh is to set up an internal panel to assess the relief proposal.

"These choices are on the cards and since the Prime Minister's Office is taking keen interest in the matter, something should be finalised soon," the source added.

These developments occur at a time when Vodafone Idea stands on the plank with a big question over the telco's survival. The company is exploring all options to stay afloat amid the cut-throat competition in the telecom market.

Vodafone Idea has sought help from the telecom department, voicing that it would not be able to pay up the spectrum installment of Rs 8,292 crore due on April 9, 2022, due to cash being utilised for settlement of AGR (adjusted gross revenue) dues and inadequacy of the operations to generate enough cash in an aggressive pricing situation.

Also Read: Kumar Mangalam Birla steps down as director, chairman of Vodafone Idea

The telco had reached out to the Centre in June to seek a one-year moratorium on settlement of spectrum installment. Vodafone Idea had also indicated the issues it was facing with regard to raising funds as investors expressed indisposition to pump money in the telco.

On August 5, Kumar Mangalam Birla stepped down from the position of non-executive director and non-executive chairman of Vodafone Idea after offering to hand over his stake in the company to the government or any other entity that the Centre may consider worthy to keep the company operational.