2-year moratorium for spectrum dues will not give respite to telecom firms: Expert
The government's decision to grant a 2-year moratorium for spectrum dues will not bring any respite for the telecom service providers, believes Sanjay Kapoor, entrepreneur and telecom expert.
The Cabinet has decided to defer receipt of spectrum auction instalment due from telecom service providers for the years 2020-2021 and 2021-2022.
“Let us step into the shoes of the operators who have been under pressure. When you are in their shoes, then every little bit that happens at this hour is a welcome step and probably it is a little bit of sigh of relief for them. Is it enough? Of course not. There is a lot more to be done,” said Kapoor in an interview with CNBC-TV18.
“There is an interest element to this as well and therefore there is no respite on the profit and loss (P&L). The P&L will still look very dodgy and under pressure and it is only the cash flows that can help,” he added.
Kapoor further said that at this stage, the most important thing for the telecom companies is the hike in prices.
"When you raise prices, there are market expectations and expectations for better customer experience. That can only happen when you deploy capital behind the customer experience and network... if things don’t work out in two years, then you are back to square one,” said Kapoor.
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