oppn parties Reforms And Relief For The Telecom Sector

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  • Supreme Court sentences Congress leader Navjot Singh Sidhu to one year rigorous imprisonment in the 1988 road rage case
  • Home Minister Amit Shah says rights should not be demanded before fulfilling responsibilities and that universities are no place to wage ideological battles
  • NIA court convicts JKLF chief Yasin Malik in terror funding case after he pleads guilty of all charges
  • A study backed by PM-EAC has recommended universal basic income and urban job guarantee and greater spend on social sector schemes
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  • After sustained campaign by BJP MP Arjun Singh, the Centre today withdrew the jute price cap order, industry welcomes move
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  • IPL: RCB crushes GT by 8 wickets as Virat Kohli returns to form with a well-made half century
  • Nikhat Zareen is world champion in flyweight category. Wins gold at Women's World Championships at Instanbul
  • Supreme Court uses its special powers under Article 124 to release A G Perarivalan, a Rajiv Gandhi assassination convict
  • Indrani Mukherjea, prime accused in the Sheena Bora murder case, gets bail from Supreme Court after 6.5 years in jail
  • Hardik Patel quits Congress, says top leaders distracted by mobile phones and state leadership busy arranging 'chicken sandwiches' for them
  • Anil Baijal resigns as Lieutenant Governor of Delhi citing "personal reasons"
Nikhat Zareen is crowned world champion in the flyweight (52Kg) category at the Women's World Championships in Istanbul /////// Supreme Court sentences Navjot Singh Sidhu to rigorous imprisonment of one year in the road rage case /////// Sunil Jakhar, who quit the Congress a few days ago, joins the BJP
oppn parties
Reforms And Relief For The Telecom Sector

By Linus Garg
First publised on 2021-09-16 03:10:19

About the Author

Sunil Garodia Linus tackles things head-on. He takes sides in his analysis and it fits excellently with our editorial policy. No 'maybe's' and 'allegedly' for him, only things in black and white.

The Union cabinet provided huge relief to the telecom sector by approving several measures that bring in much needed reforms. It has provided a 4-year moratorium on payment of spectrum charges and AGR dues. It has also brought down certain charges and redefined AGR to exclude revenue from non-core business. The telcos were demanding these measures for long and in the wake of the Supreme Court judgment ordering telcos to pay the entire AGR dues in 10 yearly installments, Vodafone-Idea had indicated that it might fold up.

The government was concerned as Vodafone's exit would have left the field open for a duopoly of Reliance Jio and Bharti Airtel (the government-owned BSNL is an insignificant player) in the vital sector. Since Vodafone has the infrastructure and the brand image to survive if could tide over its current difficulties, it was necessary to provide some relief to the sector and ensure that competition among the players would benefit the consumer and not allow just two strong companies to control and manipulate the business.

Further, with 5G on the anvil, if reforms were not introduced and if charges were high, companies would have hesitated in investing the enormous sums required for the transition. In any case, the definition of AGR needed rectification as the government cannot logically claim a share in the non-core business of companies that are licensed to operate telecom services. By now excluding non-telecom revenues from AGR, the government has acceded to the long-standing demand of the sector. If only this realization had dawned some years earlier, the long-drawn out litigation in the Supreme Court could have been avoided and things could have been settled amicably.

Among other measures, interest rates have been reduced and penalties for late payments have been waived. The government said that it would also consider converting the interest burden into equity if the need arises after the moratorium period. The licence period of spectrum has also been extended by ten years. Financial constraints in spectrum sharing, after a lock-in period, have also been removed. It also allowed 100% FDI in the sector through the automatic route, except from China and countries that share a land border.