DoT Might Take Required Measures To Improve Health Of Telecom Sector

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The Government of India is reportedly planning to come up with some measures to help the Indian telecom sector. Notably, the telecom ministry is expected to allow telcos to give up unused spectrum and redefine the definition of adjusted gross revenue.

 
DoT Might Take Required Measures To Improve Health Of Telecom Sector

DoT Measures For Telecom Sector

In addition, the Department of Telecommunication is likely to discuss other measures, including a reduction in license fees, spectrum usage charges, and elimination of bank guarantees.

"The government is looking at ways to improve the financial health of the sector, not just of one company (Vodafone- Idea). If the sector is nursed back to health, Vodafone Idea too will benefit," officials said.

However, the official said that it requires vast discussion with the finance ministry as there will be some revenue implications. Besides, redefining the definition of AGR (the major issue between DoT and telcos) is an important matter to relook.

New Definition Of AGR

For the unaware, the Supreme Court approved the DoT definition and directed all telcos to follow the same. In fact, license fees and SUC are dependent on AGR, which means redefining AGR means less dues.

"So, a fresh definition for AGR excluding all non-telecom revenue could actually help clear all the doubts and grey areas which have been a bone of contention between the telcos and the government," another senior official was quoted by ET.

The report states that the TRAI also recommended reducing license fees and SUC rates. Another major reason that was highlighted is that telcos might ask to surrender their unused spectrum to the Government along with a small penalty.

According to a report, India's third-largest telecom operator Vodafone-Idea is not using some of its spectrum, but paying instalments for the same.

 

Similarly, officials said giving more time to Vodafone-Idea to pay its dues will not help the telecom operator. The telecom operator has to pay Rs. 1.8 lakh crores, where it has to pay Rs. 1.5 lakh crores to the Government as AGR and spectrum payments.

It is important to note that the chances of Vodafone-Idea survival are very less as its financial condition is not sufficient enough to meet the debt and face the competition in the telecom operators.

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