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DoT against TRAI’s liberal payment structure for operators during upcoming spectrum auction

26 Apr 2016 Evaluate

The Department of Telecommunications (DoT) may oppose the proposal put forward by the Telecom Regulatory Authority of India (TRAI) allowing telecom companies an easier payment structure in the upcoming spectrum auction. DoT is of the view that payment terms for operators have already been eased over the years and further liberalisation in payment terms can hurt the government's revenue collections.  

In order to reduce the financial burden on operators, TRAI has recommended that telecom companies be allowed to pay 10% of the winning bid initially for any spectrum in an auction. The balance, including interest, could be paid in equal installments over the next 18 years. In addition, the regulator suggested that operators be allowed to pre-pay the entire balance or part of it, apart from paying the total amount upfront.

Currently, an auction winner can pay the entire money upfront or 25% or 33% of the total amount initially, depending on the band, and the remainder in 10 equal instalments after a two-year moratorium.

In the 2010 auctions, the government had received an upfront payment and later to support the industry, it changed it to staggered payment. Decision on the matter will be taken during the Telecom Commission’s next meeting scheduled for April 30, 2016.


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