InvestorQ : What is it that the Indian telecom industry and players like Bharti and Vodafone Idea are expecting at this point of time?
Debbie Mascarenhas made post

What is it that the Indian telecom industry and players like Bharti and Vodafone Idea are expecting at this point of time?

Answer
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Crowny Pinto answered.
8 months ago


Actually, the problem is a lot more serious for Vodafone Idea than for Bharti Airtel. For Bharti it may be a case of profitability but for Vodafone Idea it is a question of survival. That is why the telecom sector is expecting a slew of measures from the government to help them stave off a crisis. Here are some of the expectations of the telecom players.

a) The telecom sector sought measures like reduction in levies and taxes and bank funding at lower interest rates. They underlined that this kind of strategic intervention was required to revive the stressed industry in line with the National Digital Communication Policy 2018.

b) Players like Bharti and Vodafone Idea also sought government support to lessen the regulatory levies including the reduction of Universal Service Obligation Fund (USOF) charge to 3%, and reduction of license fee from 3% to 1%. Some of these may come in the 2020 Union Budget on Feb-01.

c) Telecom sector has urged DOT to review the definition of adjusted gross revenue (AGR), which is the real bone of contention. They want removal of GST from license fee, spectrum usage charge, and payment on spectrum acquired in an auction

d) Telecom players are also demand steps that would to help operationalize the new telecom policy unveiled two years back. The industry has its skin in the teeth with Rs.10.44 trillion invested in the last two decades. ARPUs in India are among the lowest.

e) In fact, the COAI which is a lobbying body for cellular players, has demanded constitution of working group for adopting the principle of input tax credit.

But the first relief will be on the moratorium on AGR, waiver of penalty and postponement of interest payable.