Mumbai, June 1:
Worried about the banking sector’s huge exposure to the
telecom industry, State Bank of India has asked the Department of
Telecom to work out a bailout package for the operators, including
deferred payment for spectrum and rationalising spectrum fee.
Lenders have an exposure of nearly ₹4 lakh crore to the sector, which could come under stress due to declining telecom revenues.
In
a letter to the DoT, SBI Chairman Arundhati Bhattacharya has proposed a
six-point action plan to address the sector’s problems.
“The
stress in the sector has reached highly unsustainable levels after the
entry of new players and launch of free services which led to erosion of
topline and EBITDA of the telecom service providers,” Bhattacharya
wrote.
“The data with us suggests that the total
EBITDA of the sector on annualised basis is ₹65,000 crore which is...
unsustainable for debt of more than ₹4 lakh crore,” she said.
SBI
said telecom companies should be given 20 years, against 10 currently,
to pay the full spectrum auction amount. It also pushed for a five-year
moratorium, against two years currently.
Noting that
telecom operators currently pay nearly 30 per cent of their revenues as
taxes and levies, the bank said the DoT should waive the USO (Universal
Service Obligation) fund levy, which is about 5 per cent of the
operators’ revenues.
In addition, GST rates should be lowered to the lowest bracket (5 per cent), given the sector’s criticality.
Bhattacharya
said operators should be allowed to access money from the USO fund to
roll out services in rural areas. “Given the importance of the sector...
and the government’s push towards a digital economy, there is a need
for large scale intervention and policy impetus for the sector to
revive,” she said.
Telecom operators
have been meeting an inter-ministerial panel pushing for a similar
relaxation citing falling revenues and the industry debt of about ₹7.5
lakh crore.
