Scrapping IUC And Tariff Hikes Might Help Telecom Operators Boost Revenue: Report


The telecom ministry has taken many steps to help revive the telecom sector. Now, it has been reported that there can be some unexpected changes in the industry in the coming days. However, the analyst believes that AGR will remain a key issue in the sector.

Scrapping IUC And Tariff Hikes Might Help Telecom Operators


"Green shoots of recovery are visible for the telecom sector, driven by one of the steepest tariff hikes announced by the telcos and deleveraging initiatives undertaken by them. Trai's decision on IUC (interconnect usage charge) and the consultation of floor price are positive," said Ankit Jain, assistant vice-president of corporate ratings at Icra was quoted by livemint.

Jain intimated that there are chances that the debt on the industry will come down, and the revenue will also improve in the next financial year. He also pointed out that AGR issues will also play an important role in 2020.

Notably, both Airtel and Vodafone-Idea have recently filed a review petition in the Supreme Court. The telecom operators are seeking some modifications on dues, as the Supreme Court wants them to pay Rs. 92,000 crore. Now, operators are looking for some relief from the Department of Telecom. On the other hand, Vodafone-Idea has cleared its stand on the issue and said the company will shut its operations from India if the government doesn't offer any relief to them.

"The year 2019 was the bottom of the trough for the sector and next year is expected to be better as ARPUs (average revenues per user) will improve. There is a little more stability on the regulatory front with IUC to stay for a year," said Rajan S. Mathews, director general at Cellular Operators Association of India was quoted by the newspaper.

Adding to that, "Given the broad implication of the Supreme Court ruling that has ensnared companies outside the telecom space, we hope the government will devise a suitable way out of the conundrum."

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