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Government forms panel to address telecoms woes: Report

File photo: A Bharti Airtel office building is pictured in Gurugram. Photograph:( Reuters )

Reuters New Delhi, India Oct 30, 2019, 11.27 AM (IST)

The government has formed a panel of bureaucrats to suggest ways to alleviate financial pressures on the telecoms sector, a ministry source said on Tuesday, days after a court order that will push mobile carriers to pay overdue government levies and interest.

Mobile operators in India have been demanding support for a sector squeezed by a price war since late 2016 and by the high cost of using airwaves, culminating last week in that Supreme Court decision upholding a demand by the Department of Telecommunications (DoT) for the nearly $13 billion it said was overdue.

A panel comprising senior civil servants will consider the industry's demands, such as the postponement of airwaves auction payments due for the 2020/21 and 2021/22, the source said.

The panel will also look at reducing airwave usage charges and the contribution levels for the government fund set up to ensure that telecoms services reach rural India in a non-discriminatory way, the source added.

Profits of Vodafone Idea and Bharti Airtel have been hit and some rivals have gone out of business since Reliance Industries' Jio Infocomm unleashed a fierce price war when it entered India's crowded telecoms market in 2016 with free calling and cut-price data.

Vodafone Idea previously said it would ask the federal government for relief on payments of at least $4 billion after the Supreme Court decision. Analysts had said the charges could force the company out of business.

Rival Bharti Airtel said it had approached the DoT to "seek clarity" on the amount it had to pay, adding that it has sought the government's support to deal with the "adverse outcome" of the court ruling.

It also postponed the release of quarterly earnings, which had been scheduled for Tuesday, to November 14.

Shares in Vodafone Idea closed 8.3 per cent down while Bharti lost 3.5 per cent in a broader Mumbai market <.NSEI> that finished with a 1.4 per cent gain.

Story highlights

Mobile operators in India have been demanding support for a sector squeezed by a price war since late 2016 and by the high cost of using airwaves