Former finance secretary Subhash Chandra Garg on Wednesday said the government should offer a one-time settlement scheme to the telecom companies to pay the principal due amount as per the AGR definition and waive the penal interest and penalties.

In a blog titled 'Rebuilding Telecom Business in India', Garg said the telecom crisis in India is not just limited to AGR-related issues.

"Offer a one-time settlement scheme to the telecom companies (both operating and under resolution) to pay the principal due amount as per the AGR definition as contained in the licensing agreements and waive the penal interest and penalties.

"Alternatively, appoint a board for Vodafone Idea Ltd by ousting the current board on the lines of action taken in the case of IL&FS and DHFL and secure a moratorium of some time on servicing of loans and government dues," he said.

Garg noted that the telecom business -- both voice and data -- is headed towards becoming a duopoly (Jio and Airtel) with the remaining two players, Vodafone Idea and BSNL-MTNL, hurtling towards eventual shutdown, which might as well be an abrupt collapse.

"This has enormous consequences for over 400 million of the customers of Vodafone Idea and BSNL-MTNL in terms of continuous availability of telecom services and also for competitiveness in the industry itself," he said.

Garg also wondered whether the government's proposal to put in billions of dollars (over Rs 70,000 crore) to revive BSNL-MTNL is advisable or not as the country is facing massive economic slowdown.

The Supreme Court last week rejected a plea by telecom firms including Bharti Airtel and Vodafone Idea Ltd for extension in the payment schedule and asked them to deposit an estimated Rs 1.47 trillion in past dues for spectrum and licenses by March 17.

Some telecom firms have said they were already struggling with mounting losses and debt and the additional liability has raised concerns of them defaulting on existing loans.