In today’s meeting of the Union Cabinet, major changes have been announced for the telecom sector. The government has announced to change the definition of Adjusted Gross Revenue (AGR). Under this, non-telecom revenue will be excluded from AGR.
In today’s meeting of the Union Cabinet, major changes have been announced for the telecom sector. The government has announced to change the definition of Adjusted Gross Revenue (AGR). Under this, non-telecom revenue will be excluded from AGR.
Large scale investment from telecom sector
Interest on payment of spectrum usage charges and interest on payment was reduced. In such a situation, interest will now be charged on an annual basis, not monthly. This decision will bring massive investment from the telecom sector.
100% FDI approved in the telecom sector
Spectrum sharing has been completely exempted. Also, 100 percent of FDI has been approved in the telecom sector. The process of filling the physical form for mobile connection in the telecom sector will be discontinued. Users will be taken mobile connection digitally. Also, the process of installing the tower will be simplified.
4G and 5G will be made in India
The Government of India has announced to make the core design of 4G and 5G as Made in India. It will be exported making it world-class. The Telecom sector has been given relaxation in the moratorium for 4 years by the central government.
The relief package provided much-needed relaxation to telecom companies — Vodafone Idea, Reliance Jio, and Bharti Airtel. “These are expected to protect and generate employment opportunities, promote healthy competition, protect interests of consumers, infuse liquidity, encourage investment and reduce the regulatory burden on Telecom Service Providers (TSPs),” the Cabinet said.
The package primarily provided relief to Vodafone Idea, which is on the brink of going bankrupt. A moratorium on AGR-related dues will offer space to the cash-strapped firm to improve its business and clear dues over a longer period.
So far, up to 49% was allowed through the automatic route and anything thereafter had to necessarily go through the government route. These measures are expected to ease the cash flow issues being faced by some players in the industry.
Former chairman of Vodafone Idea, Kumar Mangalam Birla, earlier in July wrote to cabinet secretary Rajiv Gauba, offering his stake in Vodafone Idea to the Centre or any firm approved by the government for free. And last month, Birla resigned as the chairman of Vodafone Idea.
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