Before the relief measures were announced for the telecom sector, India was scared of a duopoly between Bharti Airtel and Reliance Jio. Vodafone Idea had a mountain of debt and was just not getting a break. The telco wasn’t adding subscribers, nor had it made any profits for years. The general perception of the market was that Vodafone Idea (vi) was going to go out of business, if not right away, then sometime later.
However, with an unprecedented move, the government announced a bailout package for private companies. Telcos were given the option to opt for a moratorium of statutory dues, and both Vodafone Idea and Bharti Airtel accepted.
Sunil Bharti Mittal, Chairman of Bharti Enterprises, speaking at the Indian Mobile Congress (IMC) 2021, said the deferment of adjusted gross revenue (AGR) dues brought great relief for at least one operator. It is not hard to guess that the operator Mittal was referring to here was Vodafone Idea.
Players That Remain Will Set the Agenda for Digital India: Mittal
Mittal said that the relief package introduced by the government had brought hope for the sector. Further, the Indian business tycoon said that players who remain in the market will now be able to set the agenda for digital India.
With the relief package, there’s one thing that has been ensured — Vodafone Idea isn’t going to go out of the market any time soon. In fact, the government had offered the telcos an option to give away an equity stake against the removal of some part of dues. Neither Vodafone Idea nor Bharti Airtel has confirmed what they will do in this regard.
Mittal has also asked the telcos to come together and share tower infrastructure to reduce the overall cost of deploying the network as well as the time taken to roll out new network services. In India, the private telecom operators have largely been undercutting each other to add more users than competitors; while that is right to a certain extent, the telcos must see the bigger picture and help each other out by sharing infra costs.