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Spectrum reforms, future allocation norms will ease financial burden on telcos: COAI

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Spectrum reforms, future allocation norms will ease financial burden on telcos: COAI

Industry body COAI on Tuesday said spectrum reforms notified by the government including removal of financial bank guarantee requirements, and scrapping of SUC for future auctions are “welcome steps” that would ease the financial burden on operators. The slew of measures would go a long way in enhancing the ease of doing business in the telecom sector, the Cellular Operators’ Association of India (COAI) said in a statement.

COAI Director General SP Kochhar described them as “very welcome steps which will reduce the financial burden on TSPs (telecom service providers) and will go a long way in enhancing the ease of doing business in the telecom sector”.

The comments came as the government notified that for future spectrum auctions, the need for submission of financial bank guarantee (FBG) to securitise annual spectrum instalment has been done away with and spelt out other modalities around new spectrum allocation.

The telecom department has said that it would also appropriately address the eligibility conditions for participation in the auction so that participants have sufficient financial capacity. The government has also issued fresh guidelines for spectrum sharing.

The notification follows the blockbuster reforms and support package announced last month by the government for the telecom industry, that offered a much-needed breather to players in the sector.

“We appreciate the steps taken by the government with regard to the future spectrum assignments to the TSPs,” the COAI said lauding measures such as removal of FBG and Performance Bank Guarantee (PBG) requirements, increasing the validity of future access spectrum assignment to 30 years, defining a schedule for future spectrum auctions, providing an option for surrendering spectrum after 10 years, and removal of additional SUC of 0.5 per cent in case of spectrum sharing.

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