India’s cabinet took a number of steps to ease the financial pressures mobile operators face including increasing the spectrum holding limit and giving companies more time to pay following auctions.

The cabinet increased the spectrum holding limit in a service area from 25 per cent to 35 per cent and extended the payment terms from ten years (excluding a two-year moratorium), to 16 years, The Economic Times (ET) reported.

Increasing the spectrum cap aims to encourage consolidation in the mobile industry by making it easier for operators to sell off spectrum assets to pay down debt. The extended payment terms on spectrum purchases are designed to help increase cash flow and give near-term relief to operators faced with huge debts, and falling revenue and profitability, the newspaper said.

The cabinet also approved Telecom Commission recommendations to eliminate a 50 per cent limit on intra-band spectrum holdings, but opted to impose a separate 50 per cent cap on combined spectrum holdings in the 700MHz, 800MHz and 900MHz bands.

Rajan Mathews, director general of the Cellular Operators Association of India, said the new spectrum caps will enable consolidation in the industry, but added: “The systemic issues of the industry still remain unaddressed, like excessive taxes and levies of 30 per cent or more. We hope the government will accelerate these relief measures,” ET reported.