Shares of telecom service providers fell in the early trade on Thursday after Cabinet cleared a two-year moratorium on spectrum payments to Bharti Airtel, Vodafone Idea and Reliance Jio. However, the government is unlikely to intervene in the Supreme Court-mandated statutory payments.
Despite the positive announcement, shares of telecom service providers fell in the early trade on Thursday, with Vodafone shares trading almost 12% lower, followed by Bharti Airtel that fell 2.26%. Reliance Industries stock too fell 0.83% lower on BSE.
Telcos, who earlier had to pay statutory dues to the government over 3 months period following SC order, have been given a period of 2 years by the Cabinet.
Earlier the apex court on October 24 had given a verdict in favour of demand from Department of Telecommunications' (DoT) that non-telecom revenues should be part of the annual adjusted gross revenue (AGR), after which telecom operators came under burden of Rs 92,642 crore in license fee (LF) and Rs 55,054 crore as spectrum usage charges (SUC) to the government.
"There is no proposal before the government at present on waiver of penalties and interest on outstanding licence fee payments based on adjusted gross revenue (AGR)," Telecom Minister Ravi Shankar Prasad said in a written reply to the Lok Sabha.
Additionally, Sitharaman said the payments for spectrum won in an auction have been equally divided over the rest of the payment term of 2 years and the telcos will have to pay interest on it as well as back them with bank guarantees.
Meanwhile, Tata Teleservice (Maharashtra)(TTML) stock rose 9.3%, followed by Reliance Communications that gained 5% intraday and Mahanagar Telephone Nigam (MTNL) shares clocking 4.89% rise in morning session.