Indian Government Actively Taking Steps to Avoid Telecom Duopoly

Chauhan was asked by a law maker whether India is heading towards a possible duopoly in the telecom sector and what is the government doing to ensure that it doesn’t happen. Chauhan said that the government has put a cap on the total spectrum that an operator can have in a given telecom circle which restricts it from becoming a monopoly market.

Highlights

  • Chauhan was asked by a law maker whether India is heading towards a possible duopoly
  • Chauhan said that the government has put a cap on the total spectrum that an operator can have
  • The Department of Telecommunications (DoT) can relax and allow Vodafone Idea (Vi) to skip an AGR dues instalment

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The Telecom sector has been under a lot of stress for the past few years. Since the time Reliance Jio came in, multiple operators have gone bankrupt, and the existing ones, excluding Airtel, are struggling to make ends meet. The operators not only have to expand their network but also pay out their debt to the government and the banks. According to an ET Telecom report, Devusinh Chauhan, Minister of State for Communications, in Rajya Sabha, said that the Indian government is taking all the steps to ensure that the telcos aren’t too stressed financially.

Will India’s Telecom Industry Become Duopolistic?

Chauhan was asked by a lawmaker whether India is heading towards a possible duopoly in the telecom sector and what is the government doing to ensure that it doesn’t happen. Chauhan said that the government had put a cap on the total spectrum that an operator can have in a given telecom circle which restricts it from becoming a monopoly market. The capped amount is 35% of the total spectrum available.

Further, Chauhan noted that the telecom operators were given the option to defer the spectrum auction payments instalments for two financial years, including 2020-21 and 2021-22. To help the telcos even more, the government had increased the number of instalments the telco can make their payments in.

The minister even mentioned how the Supreme Court (SC) had asked the telcos to pay their adjusted gross revenue (AGR) dues over 10 instalments in 10 years. Regardless of the comments that come from the minister, it is quite visible that there isn’t much help provided to Vodafone Idea by the government.

The Department of Telecommunications (DoT) can relax and allow Vodafone Idea (Vi) to skip an AGR dues instalment and give the option to pay later so that right now Vi can invest in its networks. But that’s isn’t happening, and thus the operator’s aren’t really getting any big help from the government.

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