oppn parties Reforms And Relief For The Telecom Sector

News Snippets

  • Maratha quota bill likely to be tabled in Maharashtra assembly today
  • Arvind Kejriwal skips ED summons for the 6th time, says the case is in court and will follow court's decision
  • PM Modi says UP has gone from 'red tape' to 'red carpet' in 7 years of 'double engine' government
  • Farm unions reject government offers, to resume Delhi march from today
  • Centre says some Aadhar cards in Bengal 'deactivated' due to technical glitz, will be activated back soon
  • Supreme Court stays LS privilege panel summons to Bengal officials over BJP MP Sukanta Majumdar injury case
  • Supreme Court junks Sandeshkhali petition, says it cannot be compared to Manipur, asks petitioner to approach Calcutta HC
  • Supreme Court gets tough on Chandigarh mayoral elections, asks for ballot papers and video footage, does not order re-election
  • Government starts withdrawing old small tax demands, up to Rs 25000 per entry till FY 2009-10 and up to Rs 10000 per entry from FY 2010-11 to FY 2014-15 with an overall ceiling of Rs 1 lakh per tax payer
  • Stocks remained positive on Monday: Sensex gained 281 points to 72708 and Nifty 81 points to 22122
  • Jasprit Bumrah likely to be rested for 4th Test while K L Rahul may be back
  • FIH Pro League hockey: India beat Spain 8-7 in shootout
  • SP leader Salim Sherwani, miffed at no Muslim candidate given RS ticket, quits party
  • Army going for big (Rs 57000cr) upgrade in combat vehicles to replace T-72 tanks
  • Mamata Banerjee says the BJP is doing nothing to resolve the Sandeshkhali dispute but instead fanning the fires to escalate it
History created in Supreme Court as Chandigarh mayoral poll ballots counted in court, judges declare AAP candidate Kuldeep Kumar winner after taking into account the votes defaced by returning officer Anil Masih
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.