The relief will be worth Rs. 45,000 crore and the panel will continue to discuss other measures
NEW DELHI| The Government paves way for the telecom giants Vodafone and Airtel who were indulged in a price war for year-long with Reliance Jio and mounting debt. Over which Supreme Court issued last month’s demand to pay overdue fees of $13 billion. On Wednesday in New Delhi, while briefing the press Finance Minister Nirmala Sitaraman said, ‘The moratorium will be for two years beginning April 2020’. Interest, as stipulated in airwave auctions, will continue to be paid, she added.
The proposal was recommended by a panel of senior bureaucrats under Prime Minister Narendra Modi to help wireless carriers. The government estimates owe more than $20 billion in license fees and spectrum charges. The relief will be worth as much as Rs. 45,000 crore ($6.3 billion) and the panel will continue to discuss other measures to help the industry.
PM Modi intends to help preserve the survivors in a telecommunications industry that has shrunk from a dozen wireless operators a couple of years back to just three private-sector firms. Carriers that had flocked to the country’s fast-growing market were led to merge or quit the business after Reliance Jio Infocomm Ltd. Jio led by billionaire Mukesh Ambani spurred an intense price war at its launch in 2016.
When telecommunication giant Vodafone Idea projects their worst quarterly loss in India’s corporate history along with Bharti Airtel Ltd. logged a record deficit for the September quarter, Government declared relief following the loss. Jio who took over all the business had argued against government action to help Vodafone Group Plc’s Indian venture and Bharti, which is backed by billionaire Sunil Mittal and Singapore Telecommunications Ltd.
Expectations for government help and plans by carriers to raise prices sparked a rally in shares of Vodafone Idea, which more than doubled in price over the past four trading days in Mumbai. Bharti also climbed, while Jio parent Reliance Industries Ltd. jumped to a record.