Govt takes a call to save telecom firms, but no relaxation likely on AGR

After back-to-back parleys this week between the top management of telecom companies and the government, a consensus seems to have emerged on the need to save the financially stressed sector.

While Vodafone Idea Chairman Kumar Mangalam Birla and Chief Executive Ravinder Takkar did their rounds of the Department of Telecommunications (DoT) and North Block over the last few days, Bharti Airtel Chairman Sunil Mittal joined in as well to seek relief for the telecom industry faced with a bill of Rs 1.47 trillion in pending dues linked to adjusted gross revenue (AGR).

There’s no official word yet from the DoT on what measures were being planned to offer relief, but a senior official on Thursday said, “We are doing everything to save the health of the sector.” A source said the DoT and the Finance Ministry were looking at many steps to bring back the sector on track and that a ‘’monopoly’’ situation was not desirable. A telecom fund to give loans to operators is among the measures being discussed.

The Union government is of the view that there can be a debate on the quantum of payment and penalty but not on the fact that the companies have to make the payments.

In fact, Tata Teleservices, which paid Rs 2,197 crore as full and final in AGR dues on Monday, will be issued a notice seeking full payment of dues as per the Union government's calculation. The company’s dues are estimated at around Rs 14,000 crore. To press its point, the DoT is expected to issue notices to all telcos to pay their dues by March 17.

Mittal, who met Telecom Minister Ravi Shankar Prasad on Thursday, said the sector was heavily taxed and required “rationalisation” in levies. He didn’t comment on AGR dues issue.

To cross-check the AGR dues claims of the telcos, the government has decided to verify their accounts during the last few years in a random fashion. In the case of Tata Teleservices, DoT would ascertain whether the full payment claims made by the company were genuine or not. On the issue of invoking bank guarantees of the companies in case of payment default, DoT is awaiting legal opinion it sought on the AGR issue. The department, under the unified licence agreement, can invoke bank guarantees and convert it into a cash security if the service provider violates any term of the licence. The ministry has sought views on whether the guarantees should be invoked before March 17 (next date of the SC hearing).

“The government has to ensure that the telecom companies comply with the order of the Supreme Court. They have started making payments and have so far paid Rs 15,700 crore,’’ the official said. The government has to ensure that the health of the sector is not impacted and that the Union government meets its obligation towards the customers, according to the official.

It is learnt that during the meetings with the government this week, many telcos conceded they should have paid their dues after 2011, rather than waiting so long. In 2011, the matter was shifted from the SC to the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) for interpretation of the heads and computation thereof.

The AGR dispute started in 2003. On October 24, 2019, the SC ruled that AGR for telcos should include all revenues accrued to carriers, including that from non-core activities, upholding the DoT’s stance. The firms paid 90 per cent of the amount due to the government in 2003. They were supposed to pay the remaining 10 per cent to the government, along with interest, penalty and interest on penalty.

On February 14, SC had rejected the modification applications of Bharti and Vodafone Idea seeking relaxed payment scheme for the AGR dues. The top court directed the companies to make payments immediately, prompting the DoT to issue letters to telcos last Friday that payments must be made by the same midnight.

SC rejects telcos' plea for new schedule for AGR payments, slams DoT

In a major setback for the telecom companies, the Supreme Court on Friday rejected the plea seeking new schedule of AGR payments. Coming down heavily on the Department of Telecommunications (DoT) for not taking coercive action against telcos for failing to repay, the apex court ordered contempt proceedings against Bharti Airtel and Vodafone Idea.

The next hearing has been scheduled for March 17.

The Apex Court also pulled up the DoT desk officer who wrote to the Attorney General asking him to not insist on payemnt of dues. The SC issued a contempt notice to the officer to explain why no action should be initiated against him.

The court summoned managing director, director of all telcos including Bharti Airtel, Vodafone Idea and others on March 17 to explain why these dues were not deposited despite orders and why contempt action must not be taken against them for non-compliance of order.

A bench of justices Arun Mishra, S Abdul Nazeer and M R Shah heard a batch of petitions filed by telecom companies in open court.

Earlier on January 16, a bench headed by Justice Arun Mishra had dismissed review petitions of telecom firms seeking review of its earlier order asking them to pay Rs 1.47 trillion in statutory dues by January 23, saying it did not find any "justifiable reason" to entertain them.

The apex court had on October 24 last year ruled that the statutory dues need to be calculated by including non-telecom revenues in AGR of telcos.

It had upheld the AGR definition formulated by the DoT and termed as "frivolous" the nature of objections raised by the telecom service providers.

In an affidavit filed in the top court, DoT said that according to calculations, Airtel owes Rs 21,682.13 crore as licence fee to the government and dues from Vodafone totalled Rs 19,823.71 crore, while Reliance Communications owed a total of Rs 16,456.47 crore. BSNL owed Rs 2,098.72 crore and MTNL Rs 2,537.48 crore.

"The definition of gross revenue is crystal clear in the agreement. How the adjusted gross revenue to be arrived at is also evident. It cannot be submitted that the revenue has not been defined in the contract. Once the gross revenue is defined, one cannot depart from it and the very meaning is to be given to the revenue for the agreement," the apex court had said in its October verdict.

Telcos to miss Jan 24 AGR deadline, wait for 'modification' plea hearing

Leading telecom companies including Bharti Airtel, Vodafone Idea, and Tata Group are planning to communicate to the Department of Telecommunications (DoT) that while they will comply with the Supreme court order on paying adjusted gross revenue (AGR) dues, they will wait till next week, when their “modification” petition is heard in the apex court, before paying.

The move means the telcos will skip the January 24 deadline the court gave for paying the government Rs 1.47 trillion.

While the three companies said they would not comment on the issue, top sources said Bharti Airtel would send the letter on Thursday.

About others it is not clear whether they sent a communication on Wednesday or are considering doing it on Thursday.

According to top sources close to Reliance Jio, the telco is expected to pay its entire dues of Rs 177 crore on Thursday and has provisioned for the liabilities in its latest financial results.

Jio had not been party to the review petition and had a different stance on the matter.

Telecom companies have to pay Rs 1.47 trillion as AGR to the government on the basis of the Supreme Court order in October last year.

After a review petition against the judgment was rejected, the three telcos filed a “modification petition” before the apex court this week.

A Bench headed by Chief Justice of India S A Bobde agreed to list this petition “sometime next week”, after the deadline, with the same Bench that handled the review petition.

The telcos in their petition sought a change in the payment deadline for their dues as well as permission to engage with the DoT on the terms and timing of payment. It means they are looking at, just as in the case of spectrum, a staggered payment plan, which could include a moratorium for a few years.

An official on Tuesday said the DoT had to take action in case the telcos did not pay their dues by January 24.

Lawyers say that in the case of a default, the DoT can immediately encash the bank guarantees of the telcos, and of these there are precedents.

However, as the guarantees do not match the Rs 1.47 trillion in question, it could issue a show-cause notice as to why their licences will not be cancelled and give the telco a stipulated amount of time to respond to the query.

Officials of the Cellular Operators Association of India say that they, basing themselves on their talks, do not see the department taking a tough posture because of the serious financial crisis in the industry.

Lawyers advising the telcos have pointed out that there are enough precedents of the Supreme Court not executing its earlier order when fresh adjudication is in process in the same court.

Lawyer C A Sundaram, who is representing a telco, told the apex court that they were not disputing the payment to be made; rather, they want to work out a fresh schedule of payment.

Telecom dues: Curative petitions rarely admitted by SC, say analysts

With just one week left for them to pay over Rs 88,600 crore in past dues, Bharti Airtel and Vodafone Idea are left with last legal remedy of filing a curative petition but such petitions are rarely admitted by the Supreme Court, analysts said on Friday.

The Supreme Court on Thursday dismissed review petitions filed by telecom companies against its October 24, 2019 order that asked for inclusion of non-telecom revenues for calculating statutory dues such as license fee and spectrum usage charge.

Dues, which total to Rs 1.47 trillion for 15 telecom companies including Airtel and Vodafone Idea Ltd (VIL), as per the October order, have to be paid by January 23.

This January 23 deadline for payment may not apply to non-telecom companies which too have been asked to pay substantial amounts in past dues, Kotak Institutional Equities said in a note.

"From a legal standpoint, the only option available to the telcos now is a curative petition," it said.

The rules around curative petition are fairly tight as the petitioner has to establish that there was a genuine violation of principles of natural justice, it said adding the court can impose 'exemplary' costs to the petitioner if the plea lacks merit. "We note that curative petitions are rarely admitted." ICICI Securities said Bharti Airtel has already raised capital of $3 billion, which should help it meet the burden. "But the same remains a herculean challenge for VIL – a challenge that cannot be resolved without government intervention, in our view." Though Bharti Airtel and VIL can still file a curative petition, "the probability of resolution remains bleak," it said.

UBS Group said the ruling raises risks for lenders to the companies. "IndusInd, Yes Bank and SBI appears to have relatively high exposure to Vodafone Idea," it said.

Voda Idea tanks 39% on AGR blow but Airtel jumps as analysts remain bullish

Shares of telecom companies, including Bharti Infratel and Vodafone Idea, and banking firms such as IndusInd bank and YES Bank, were trading actively at the bourses on Friday after the Supreme Court Thursday rejected the review petitions moved by Bharti Airtel, Vodafone Idea and Tata Teleservices against its October 2019 order on payment of dues linked to adjusted gross revenue (AGR). With this, the telcos will have to together pay an estimated Rs 1.47 trillion in AGR dues that include penalties and interest on penalties by January 23.

In the early deals, Vodafone Idea plunged 39.3 per cent to hit a low of Rs 3.66 on the BSE. A total of 264.17 million shares changed hands on the BSE and NSE till the time of writing of this report. Vodafone Idea, which has to pay out a total AGR dues of Rs 53,038 crore said, ‘’the company is exploring further options, including filing of a curative petition.’’

Brokerage firm Citi, in its latest report, said that situation for Vodafone Idea "remains precarious" given that the liability equates to more than 2x to its current market cap. Meanwhile, according to estimates by Credit Suisse, net debt of Vodafone Idea could escalate to over 8x.

"The verdict may put a severe burden on telcos and have unconceivable repercussions, particularly against the backdrop of Vodafone Idea facing a risk of shutdown (it may result in Rs 1.2 lakh crore debt default, large-scale job losses and subscriber churn," said analysts at MOFS.

They, however, pin hopes on goverment intervention to save the telecom firm.

"Centre has to recover INR900 b as deferred spectrum debt from VIL, which has stated it will shut operations if asked to pay the entire AGR liability. Also, VIL owes INR300b to banks (against this, Aditya Birla Group and Vodafone Plc’s stake in VIL stands at a mere INR70b and INR80b, respectively). Moreover, the implication on end-customer in the advent of VIL shutdown could be terrible. In such a scenario, we believe that the government may look to exercise other options," they said.

That apart, Bharti Infratel slumped 13.17 per cent to Rs 210.85 on the BSE. Analysts at Edeweiss Securities maintain 'hold' rating on the stock (target price Rs 293), given thaat it is trading at 6.6x FY21E EV/EBITDA.

Bharti Airtel, on the other hand, gained up to 5.1 per cent to hit a 26-month high of Rs 498.65 on the BSE. So far, about 12.6 million shares have changed hands on the counter on the NSE and BSE. Analysts remain positive on the stock after it managed to raise $2 billion (approx. Rs 14,000 crore) through the QIP route.

"Bharti Airtel has sought relief on AGR liability but also prepared itself with a plan-B by raising nearly Rs 14,000 crore during the past week by way of QIP and FCCB (Rs 700 crore). The balance Rs 13,000 crore could be funded by bank loans. Bharti’s present net debt stands at Rs 89,000 crore with EBITDA of Rs 40,000 crore in FY21 (net debt to EBITDA of 2.2x). So, incremental Rs 13,000 crore would still keep net debt manageable at Rs 1,02,000 crore with 2.6x net debt to EBITDA," said analysts at Motilal Oswal Financial Services.

They further added that given the adverse situation for Vodafone Idea, Reliance Jio and Bharti Airtel could "gain disproportionately".

"Thus, irrespective of an adverse ruling, Bharti has best hedged position even if it is required to pay the AGR liability. Assuming subscriber share of 70:30 for RJio/Bharti, both telcos could see EBITDA addition of INR240b/100b with 70% margin, implying a jump of 55 per cent/20 per cent," they said.

Analysts at BofA-ML and Edelweiss Securities, too, maintain buy/positive stance on the stock.

"Given sufficient cash on its books, Bharti Airtel would be able to repay the dues and thus gain market share from competitors... While Bharti Airtel will have to now shell out INR340bn, it would be net-positive since revenue would spike without a concomitant addition of costs," said analysts at Edelweiss Securities.

They added: In the absence of any government intervention, the market would turn into a duopoly benefitting incumbents Bharti and JIO. Bharti Airtel is trading at 7.2x FY21E EV/EBITDA, thus we maintain ‘BUY’ on the stock with a target price of Rs 533.

Disappointed with the decision, Bharti Airtel, which is facing an estimated AGR demand of Rs 35,586 crore said it was evaluating filing a curative petition, which is the last judicial resort available for redressing grievances.

A collapse of Vodafone Idea, however, could erode Bharti Airtel’s value in its subsidiary Bharti Infratel as Vodafone Idea is a large customer for Bharti Infratel.

According to analysts at SBICAP Securities, a decline of Vodafone Idea will accentuate tenancy losses and pressure on profitability. “Bharti Infratel contributes about 12 per cent of estimated FY20 consolidated Ebitda for Bharti Airtel and around 8 per cent of the fair value ascribed to Bharti Airtel," they said.

“The industry continues to face severe financial stress and the outcome could further erode the viability of the sector as a whole. The industry needs to continue to invest in expanding networks, acquiring spectrum and introducing new technologies like 5G,” Bharti Airtel said.

FINANCIALS TANK

Banking counters, including YES Bank, IndusInd Bank, State Bank of India, and IDFC First Bank plummeted at the bourses today given the huge exposure to the telecom sector. According to industry estimates, telcos owe nearly Rs 1.3 lakh crore to banks.

IDFC First Bank, YES Bank, and IndusInd Bank have exposures between 8 and 12 per cent of networth to Vodafone Idea. Shares of IDFC First bank slipped 8 per cent to Rs 41.4 on the BSE, YES Bank tanked 6.8 per cent to Rs 37.2, and IndusInd Bank was down 4.9 per cent to Rs 1,317.4 on the BSE.

Besides, SBI and Punjab National Bank, that have exposure up to 6 per cent of the networth, declined 3.8 per cent and 3.2 per cent, respectively.

According to estimates by brokerage firm Nomura, SBI's exposure at Rs 14,000-15,000 crore is 0.65 per cent of its H1FY20 loan book. "The net imapct would come in at Rs 5,000-7,000 crore, which should be manageable for SBI," it said.

Telecom lobby meets Sitharaman, seeks help in meeting SC-ordered dues

India’s telecom companies on Friday asked the government to reduce licence fee and spectrum usage charges, seeking help again after the Supreme Court asked them to pay Rs 92,642 crore as adjusted gross revenue (AGR).

The industry also asked the government to create an infrastructure bank that will raise tax-free bonds, the proceeds of which can be used to lend to the companies at lower rates, said Rajan Mathews, Director General of Cellular Operators' Association of India (COAI) after a pre-budget meeting with Finance Minister Nirmala Sitharaman.

The first thing that we highlighted was the matter of AGR, the high licence fee, and spectrum usage charges (SUC) that are being paid by the industry, Mathews said.

"We represented that they be brought down... We urged that licence fee which is currently at eight per cent be lowered to about 3 per cent, and SUC which is presently at 5 per cent be brought down to 1 per cent... and to see if it could be done over an appropriate period of time," he said.

The comments assume significance as the debt-laden telecom industry is saddled with Rs 1.47 lakh crore in additional statutory dues in the wake of a recent Supreme Court ruling on AGR.

Telecom companies owe the government Rs 92,642 crore in unpaid licence fee, and another Rs 55,054 crore in outstanding spectrum usage charges.

According to government data, the liabilities in the case of Bharti Airtel add up to nearly Rs 35,586 crore, of which Rs 21,682 crore is licence fee and another Rs 13,904.01 crore is the SUC dues (excluding the dues of Telenor and Tata Teleservices).

In the case of Vodafone Idea, this number stands at a cumulative Rs 53,038 crore, including Rs 24,729 crore of SUC dues and Rs 28,309 crore in licence fee.

The remaining liability is with state-owned BSNL and MTNL and private telecom companies that shut after bankruptcy.

The Supreme Court had allowed three months to the affected telcos to cough up the amounts due to the government, and the telecom department subsequently shot-off notice to players to pay their revenue share dues within the timelines stipulated by the court.

The department has given option to operators to clear all the dues on self-assessment basis. On AGR dues, Mathews pointed out that Department of Telecom has said they will await clarity from the Supreme Court.

The industry has also asked the government to clear GST input tax credit dues worth about Rs 36,000 crore. "We have also raised GST related issue... Our spectrum and licence fee are taxed at 18 per cent because they are classified as services. We said they are not services," Mathews said.

COAI also urged the government to remove the high import duties on telecom equipment, that will only serve to increase costs for the cash-strapped industry and may hamper roll out of networks and new technology.

"We talked of duties on equipments... We said 4G equipment and 5G equipment should be brought to normal levels if not free because they fit into the PM's vision of connected digital India...," Mathews said.

India's telecom sector is staring at decimation, thanks to state action

So why does the Indian state seem determined to push telecom businesses into crushing debt and possible bankruptcy, instead of ensuring the sector remains healthy and competitive? This week, one of India’s three remaining large telecom companies, Bharti Airtel Ltd, postponed the announcement of its financial results for the last quarter. This isn’t good news, given that in the quarter ending in June 2019 it reported a loss for the first time ever. Bloomberg News’ average of analysts’ expectations from the quarter ending in September is that the company will lose Rs 14 billion, almost $200 million.

The immediate reason for the delay is clear: a recent Supreme Court judgment that ordered Bharti Airtel and other legacy telecom companies, including Vodafone Idea Ltd, to pay billions of dollars to the government. The decision sprang from a long-running dispute between the sector and the state on how to calculate the government’s share of revenue, which it receives as part of the fee for handing over telecommunications spectrum. The companies argued that only their revenue from the use of spectrum should count; the government wanted a share of everything including, for example, revenue from rent.

The Supreme Court has now ordered the companies to pay the government not just the dues but a hefty penalty -- as well interest on both. The total amount the companies owe approaches $13 billion. Vodafone Idea owes $4 billion of that, Bharti Airtel around $3 billion.

The companies are supposed to pay up in three months, though it’s far from certain how that’s possible. They’re already snowed under with debt -- thanks, in large part, to the Indian state. Vodafone Idea’s debt in March 2019 was $14 billion; Airtel’s was over $15 billion. Some of that debt burden is thanks to the exorbitant amount they’ve already shelled out for spectrum. The government changed an earlier policy that subsidized spectrum to one involving auctions that would maximize the amount that it receives as revenue -- great news for the drafters of the budget, bad news for investment in the sector and overall growth.

It doesn’t help that the sector’s caught in a bruising price war thanks to a cash-rich new entrant: Reliance Jio Infocomm Ltd., which can call upon the massive war chest of petrochemicals major Reliance Industries Ltd. Jio’s two rivals have long accused it of receiving favorable regulatory decisions, such as one that allowed 4G spectrum that had been assigned for data to be used for voice services as well. Jio’s entrance into the market has been great news for Indian consumers, who now get high-speed data at some of the lowest rates in the world. But it means that Jio’s already heavily burdened competitors may go under.

The government now says it will convene a panel of senior bureaucrats to consider how to ease financial stress among telecom companies. Yet, this comes after it’s attempted to squeeze every last rupee out of the sector to pay for spectrum, imposed adverse regulation and then appealed legal decisions all the way to the Supreme Court. Moreover, the government is also planning to spend $6 billion to revive moribund state-owned telecom companies and assign them 4G spectrum at an “administrative” cost. The price war will now include not just deep-pocketed Jio but the even deeper pockets of the Indian state.

There’s no point making the laissez-faire argument and shrugging one’s shoulders if Vodafone Idea and Bharti Airtel shut down. It’s hard to see why any new investors would want to enter a market in which the playing field is so uneven. Besides, past investors have already been burnt by state action: Norway’s Telenor ASA, the UAE’s Emirates Telecommunications Group Co. PJSC and Russia’s Sistema PJSFC wrote off investments worth about $2.5 billion after the Supreme Court canceled licenses en masse a few years ago, following corruption allegations that have not been upheld by the courts.

Foreign investors will also note that they can’t even appeal to international arbitration anymore, since the Indian government unilaterally canceled the investment treaties that made that possible. Investment by existing operators into the new infrastructure that could power India’s future -- such as 5G -- looks unlikely in the near future.

India’s statist politicians seem to assume that every sector is a cash cow for their welfarism, and that foreign investors can’t quit India. They had better think again. Aviation has already been decimated by state action; it looks like telecom is next, in spite of the fact that it is the backbone of any realistic growth strategy for India. The government’s boasts about improving the ease of doing business in India, or of being a magnet for investment, ring awfully hollow given how hard politicians are making it for healthy, competitive markets to survive.

Blow to Bharti Airtel, Voda Idea: SC rejects appeal against AGR definition

Supreme Court on Thursday rejected telecom companies’ appeal against the Union government’s definition of Adjusted Gross Revenue. The apex court will later decide on the timeframe for the operators to pay AGR.

The definition of AGR has been a long standing issue between the Department of Telecommunications and the Telecom Service Providers (TSPs), in particular, on some items that the TSPs strongly believed should not be included while calculating AGR since these are not part of the core telecommunications services.

The Cellular Operators Association of India (COAI) had in 2005 filed the first case, challenging the government’s definition on calculation of AGR. It had contended that the components of AGR, which the government was trying to include, were contrary to the Telegraph Act and the recommendations made by the Telecom Regulatory Authority of India (TRAI).

While the industry has already paid 85% of the demand raised by the DoT, the remaining 15% has remained in disput for a very long time with the telcos getting favorable judgments in various legal forums, including Telecom Disputes Settlement and Appellate Tribunal (TDSAT), High Courts and even the Supreme Court.

The telecom companies have withheld these payments as per legal judgments till date that have clearly favoured the arguments made by the industry on the definition of AGR, industry sources said.

After today's judgment, the industry will need to pay these dues to the government. The total dues amount to Rs 92,641 crore (disputed actual demand is Rs 23,189 crore, levy of interest of Rs 41,650 crore, penalty of Rs 10,923 crore and interest on penalty of Rs 16,878 crore). The industry feels that the demand is unjust given previous judgments, where the same was held in favour of the industry by TDSAT on two occasions (2007 and 2015). The Supreme Court in 2011 also remanded the matter back to the TDSAT for interpretation of the heads and computation thereof.

Experts feel that the telecom industry is in deep financial distress and any arbitrary demand/penalty imposed on it will prove to be catastrophic. Operators like Reliance Communications, Aircel, Telenor and Tata Teleservices have already closed down or are in Insolvency and Bankruptcy Code (IBC), so recovery of the said amount from them will never happen.

After the judgment, a statement released by Airtel said, "We are disappointed by the verdict of the Hon’ble Supreme Court. The definition of AGR has been a long standing dispute between the DoT and the Telecom Service Providers (TSPs) dating to 2005. The issue of inclusion of revenue from non-telecom activities and interpretation of the heads included in the definition of AGR under the license conditions has been through several rounds of litigation, which have been in favour of the TSPs till now."

"The TSPs have invested billions of dollars in developing the telecom sector and providing world-class services to consumers. This decision has come at a time when the sector is facing severe financial stress and may further weaken the viability of the sector as a whole. Of the 15 old operators impacted by the order, only two private sector operators remain in service today. The Government must review the impact of this decision and find suitable ways to mitigate the financial burden on the already stressed industry. We will be able to comment further only after reviewing the order in detail," the statement added.

Govt considering Rs 74,000-crore bailout plan to revive BSNL, MTNL: Report

The government is considering a Rs 74,000-crore bailout plan for revival of two state-owned telecom companies Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL), a media report said.

The plan offers an exit package to thousand of employees, including an additional 5% compensation to make the voluntary retirement scheme (VRS) attractive, while providing for 4G spectrum and capital expenditure, Times of India reported.

One of the main reasons for the company running in lossES has been high expense ratio between wages and revenue on account of large number of employees that were transferred by the government to BSNL at the time of its formation.

According to official data, a total of 1,63,902 employees, including 46,597 executive and 1,17,305 non-executive, were working in BSNL as on March 31, 2019.

While BSNL is the country's biggest loss-making PSU with estimated Rs 13,804 crore in FY19, MTNL came in third with a loss of Rs 3,398 crore.

Officials familiar with the proposal told Times of India that 4G spectrum valued at over Rs 20,000 crore will be allotted by the government and rollout cost of around Rs 13,000 crore will be paid by the PSUs. The government will foot the bill of little over Rs 40,000 crore towards the VRS package and early-retirement benefits.

The Union government has set up a panel headed by Telecom Secretary Aruna Sundararajan to look at rationalisation and remove ambiguities in ease of doing business.

The panel will revisit spectrum usage charges and the report is expected in two weeks.

If the issues require legal clarity, the matter will go to the Solicitor General of India. Attorney General K K Venugopal has appeared for telecom companies in the past.

“We will make a focused attempt on the revival of BSNL and MTNL and will move a Cabinet note on that very soon. The details are being worked out,” Telecom and IT Minister Ravi Shankar Prasad said.