The Indian government is thinking about offering relief to the ailing telecom industry. The telecom sector has seen multiple challenges in the last year owing to the increase in data consumption and rising network services demands. To fulfil the needs of the users, the operators have worked really hard and spent a lot of money on improving and expanding their network infrastructure. Adding to the high costs involved in improving the network, the operators also need to pay adjusted gross revenue (AGR) dues, license fee (LF), spectrum usage charges (SUC), and provide bank guarantees (BGs) against dues.
According to an ET Telecom report, the government is considering ways through which it can help with improving the financial health of the telecom sector. A senior government official aware of the matter told the publication that if the financial health of the sector can be improved, it would help Vodafone Idea a lot as well. However, the matter will first have to be discussed with the finance ministry as it would affect the revenues of the government majorly.
AGR Dues Might Not Include ‘Non-Telecom’ Items
One of the biggest disappointments for the industry was when the telcos had to pay AGR dues on non-telecom items/revenues. It shot up the total AGR dues amount for the operators and stressed the industry. Bharti Airtel and Vodafone Idea together owe the government Rs 1.02 lakh crores in AGR dues. This debt is slowly pushing Vodafone Idea out of the market.
Further, the government might reduce the LF for the telcos and phase out SUC over time. The telcos might also be able to surrender their unused spectrum for a small penalty. Right now, the telcos can only trade or share the purchased spectrum. But if things go accordingly, they will be able to give it back to the government for a small penalty.