Relief to Telcos Will Not be a Temporary Step But Good for the Industry in Long Term

The telecom companies in India are aching for some relief from any side, whether it from the regulator of the industry, the Telecom Regulatory Authority of India (TRAI) or the government, which would come from the Department of Telecommunications (DoT). While Vodafone Idea is engrossed in a deep financial trench of its own, Bharti Airtel has AGR dues and spectrum dues to pay, which have been burdened further in the March of this year courtesy of the spectrum auction. However, most of the speculations about the relief in the telecom industry have taken a myopic vision. The relief measures in the telecom industry have been expected to benefit the companies financially and help them stay in the field, aiding their survival. But, what a lot of people have missed out on are the long term effects of any relief measure that might knock on the industry’s door.

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The AGR Debate

First is the debate of Adjusted Gross Revenue (AGR), which is to be paid by Vodafone Idea and Bharti Airtel. Reliance Jio remains largely out of this debate and is the only telecom operator which seems to be doing well regardless of the situation. The government has taken a two-frontal stance on the issue while saying that it wants to ensure a “three-player industry” with the survival of Vodafone Idea, whereas mounting constant pressure on the telecom companies to pay AGR dues. The DoT is also contesting Bharti Airtel for AGR dues on the spectrum bought from Videocon in the courtrooms. The DoT, on the other hand, had also demanded the AGR dues on the same spectrum during the insolvency proceedings of the former company. The same was reiterated by the legal counsel of Bharti Airtel during the latest hearing on the matter.