Vodafone Idea, Bharti Airtel, and Reliance Jio, all have shown their support for the relief measures that were announced by the government today. The Government of India (GoI) has changed its definition of the adjusted gross revenue (AGR) dues and have also allowed a moratorium with interest rates for four years in the payments related to AGR and spectrum purchased, ease in process of getting clearance for tower installation, 100% Foreign Direct Investment (FDI) through automatic route which will aid the telecom sector in the long run, and digital KYC among other things.
All of these measures will help Vodafone Idea, Bharti Airtel, and Reliance Jio in their business. Telcos will have to worry less about dues for the next four years at least. This will mean that they can invest more money in their networks. It is a little unclear whether Airtel would take the moratorium advantage since it will be wary of the interests which will be accrued over time.
However, one thing’s clear, this is a strong step of the government in showing that it cares about the Digital India vision and is ready to help the private companies if needed.
Telcos Show Their Support
All the telcos have said that this move from the government will boost the Digital India vision and will further aid the economy. This was a very crucial decision for the sector which would have made it or broken it in the short term. Had the relief package not arrived, chances of Vodafone Idea sliding out the market was quite high. But that risk is not there anymore, at least for the next four to five years.
With the 5G era, a lot of things can change and Vodafone Idea can certainly build a business where it can solidify its brand just as good as Jio and Airtel’s in the next few years. With the arrival of the relief package, the market sentiment towards the telecom companies will be very positive and this should ideally help their stock prices too.