oppn parties Reforms And Relief For The Telecom Sector

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  • SP drops two candidates owing allegiance to Azam Khan from Rampur and Moradabad
  • In Assam, a controversy erupted after a picture of UPPL leader Benjamin Basumatary, lying on a stack of Rs 500 notes circulated on social media. UPPL is an ally of the BJP
  • AAP's Jalandhar-West MP Sushil Kumar Rinku joins the BJP. He was the only AAP Lok Sabha MP
  • Supreme Court dismisses Centre's plea to review its 2023 verdict in the PMLA case
  • Close save for passengers as they remain unhurt after the wings of two planes graze at Kolkata airport. Pilots derostered and inquiry ordered by DGCA
  • Bengal BJP leader Dilip Ghosh gets notice from the EC as well as the BJP for making ugly remarks about Mamata Banerjee's parentage
  • Sadanand Vasanth Date, who faught terrorists in the 26/11 attack and was awarded the Preisent's Police medal, has been appointed the head of the NIA
  • Centre will borrow Rs 7.5L cr in the first six months of FY25, nearly 50% of the target for the full year
  • 25 stocks, including SBI, will see same day trade settlements from today in the world's fastest settlement mode in both BSE and NSE
  • Stocks recover smartly on Wednesday: Sensex rises 526 points to 72996 and Nifty 118 points to 22123
  • Tennis: Rohan Bopanna-Matthew Ebden reached the semifinals of the Miami Open
  • IPL: records tumble as SRH beat MI in a high-scoring match. SRH score 277/3 with 18 sixes and Mumbai score 246 with 20 sixes to fall short by 31 runs. Atotal of 38 sixes, highest in an IPL match were hit and both teams combined to score 523 runs, the highest aggregate in an IPL match
  • Amul will launch fresh milk in the US
  • IPL: RCB beat Punjab by 4 wickets as Kohli and Karthik shine with the bat
  • India strongly objected to German foreign office remarks over the arrest of delhi CM Arvind Kejriwal, called it "biased assumptions"
Delhi Lt Governor Vinai Kumar Saxena says government cannot be run from jail, hints at President's Rule in the capital ////// In a dangerous incident, the wings of two planes grazed while taxiing on the runway at Kolkata airport, all passengers were safe but DGCA ordered an inquiry and the pilots were derostered
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.