Telecom Sector Relief Package Might Come In September

The longer the government waits, the weaker the sector will become. Even though Reliance Jio and Bharti Airtel are in a good position, the other telcos are scratching for profits. Note that Airtel also has a ton of debt on its shoulders which affects its investing capacity.

Highlights

  • The longer the government waits, the weaker the sector will become
  • The relief measures from the government might include the drop in LF charges from 8% to 6% of the AGR, which will potentially help the telcos in thousands of crores
  • The relief package could help the telcos in being ready for the upcoming challenges from rolling out 5G and expanding fiber business throughout the country

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Telecom sector relief package

The Telecom sector is burdened by the adjusted gross revenue (AGR) dues, license fees (LF), spectrum usage charges (SUC), bank guarantees (BGs), and more. With all of these liabilities on the shoulder of a telco, being in loss can majorly affect the market’s outlook for a company’s future. The government could help the industry and the telcos at a time such as this by introducing a relief package. The relief package could help the telcos in being ready for the upcoming challenges from rolling out 5G and expanding fiber business throughout the country. To help the sector, a quick relief measure is necessary. Vodafone Idea especially can’t wait for long to get any sort of help from the government. Thus, the government might announce the relief package as early as this month, i.e., September.




Coming Out With Relief Package Necessary, Here’s What The Relief Measures Might Be

The longer the government waits, the weaker the sector will become. Even though Reliance Jio and Bharti Airtel are in a good position, the other telcos are scratching for profits. Note that Airtel also has a ton of debt on its shoulders which affects its investing capacity.

According to a report from the TelegraphIndia, the government is expected to come out with the relief package in September only. To add to this, Kumar Mangalam Birla, Chairman of the Aditya Birla Group, had recently met with the telecom minister. It is heavily speculated that the meeting was regarding bringing the relief measures for the sector and that too as early as possible.

The relief measures from the government might include the drop in LF charges from 8% to 6% of the AGR, which will potentially help the telcos in thousands of crores. The government might further allow the telco to defer the spectrum payments for another two years. Redefining the AGR would also be very helpful since the telcos don’t want the government to include the non-telecom revenues while calculating dues.

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