- Title: India approves relief measures for telecoms sector
- Date: 15th September 2021
- Summary: NEW DELHI, INDIA (SEPTEMBER 15, 2021) (ORIGINALLY 4:3) (ANI - NO USE INDIA) ***WARNING: CONTAINS FLASH PHOTOGRAPHY*** (SOUNDBITE) (Hindi) INDIAN TELECOM MINISTER, ASHWINI VAISHNAW, SAYING: "A decision to rationalise the definition of AGR has been taken. The non-telecom revenue will be taken out of AGR (adjusted gross revenue)." NEW DELHI, INDIA (FILE - JANUARY 10, 2017) (O
- Embargoed: 29th September 2021 16:08
- Keywords: Airtel India Jio New Delhi Reliance Vodafone autos cabinet telecoms
- Location: NEW DELHI/MUMBAI, MAHARASHTRA/GURUGRAM, HARYANA, INDIA
- City: NEW DELHI/MUMBAI, MAHARASHTRA/GURUGRAM, HARYANA, INDIA
- Country: India
- Topics: Asia / Pacific,Government/Politics
- Reuters ID: LVA002EUTWSB3
- Aspect Ratio: 16:9
- Story Text: EDITORS PLEASE NOTE: THIS EDIT CONTAINS CONVERTED 4:3 MATERIAL
India's federal cabinet on Wednesday (September 15) approved a relief package for its cash-strapped telecoms sector including a four-year moratorium on airwaves payments due to the government, the country's telecoms minister said.
The deferred payments cycle will begin from October 1, telecoms minister Ashwini Vaishnaw told a news conference, giving debt-ridden Vodafone Idea - which previously said it runs the risk of a shutdown without government help - more time to pay dues.
Shares in Vodafone Idea rose 2.9% on the news, while Bharti Airtel closed 4.5% up in a broader Mumbai market that closed 0.8% higher.
Some of the other measures announced in the telecoms package include raising the tenure of airwaves held by firms to 30 years from the current 20 years, waiving the usage charge for airwaves acquired via future auctions, and completely free sharing of spectrum between carriers, Vaishnaw said.
Bharti Airtel and Reliance Jio said the measures will boost growth in the telecoms industry. Vodafone Idea's owners, Britain's Vodafone Group, and India's Aditya Birla Group said the reforms will help unshackle the telecoms sector.
India's telecoms sector ran into trouble in late 2016 with the entry of billionaire Mukesh Ambani's Reliance Jio, sparking a price war that has forced some rivals out of the market and turned profits into losses.
Vaishnaw said the government was changing the contentious definition of adjusted gross revenue (AGR) to count only telecoms revenue.
India had long held that even companies' non-telecoms revenue was part of AGR, leading to a lengthy legal battle which culminated in 2019 with the Supreme Court siding with the government's view and leading to a bill of roughly $13 billion for wireless carriers.
All telecoms reforms will be applied going forward and not retrospectively, Vaishnaw said, which means Indian carriers still have to settle billions of dollars in outstanding AGR payments to the government.
The measures, which also include a four-year deferral in payments of AGR dues, will likely ease the cash crunch at Vodafone Idea.
The Supreme Court had directed companies to clear AGR dues by 2031.
Vodafone Idea, a combination of the India unit of Britain's Vodafone Group and domestic telecoms firm Idea Cellular, has paid the government 78.54 billion rupees ($1.07 billion) in AGR dues, but still owes roughly 500 billion.
It is saddled with net debt of 1.91 trillion rupees and its billionaire chairman's resignation last month sparked fears that India might be left with just two major carriers.
Bharti Airtel has said it paid dues estimated at 180 billion rupees and government figures show it owes a further 259.76 billion.
India's newest carrier, Reliance Jio has already paid its small share of AGR dues.
As part of the measures, the cabinet also allowed 100% foreign direct investment in the sector via the automatic route, Vaishnaw said, a move that will allow easy investment in the sector without separate government approvals. - Copyright Holder: FILE REUTERS (CAN SELL)
- Copyright Notice: (c) Copyright Thomson Reuters 2021. Open For Restrictions - http://about.reuters.com/fulllegal.asp
- Usage Terms/Restrictions: Audio restrictions: This clip's Audio includes copyrighted material. User is responsible for obtaining additional clearances before publishing the audio contained in this clip.