- Thursday, April 25, 2024
By: Shubham Ghosh
THE Indian government on Wednesday (15) approved a relief package for its cash-starved telecoms sector, including a four-year moratorium on airwaves payments due to the government, the country’s telecoms minister Ashwini Vaishnaw told a news conference.
He said the deferred payments cycle will start from October 1, giving the debt-ridden Vodafone Idea, which had earlier said it runs the risk of a shutdown if the government did not help it, more time to pay dues.
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India’s telecoms sector ran into trouble in the later phase of 2016 after billionaire Mukesh Ambani’s Reliance Jio entered the market, triggering a price war that saw some of its rivals bowing out of the market and turned profits into losses.
According to Vaishnaw, who took over in July, the Narendra Modi 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 the AGR, causing a lengthy battle which resulted with the Supreme Court backing the government’s view and leading to a hefty bill of around $13 billion for wireless carriers.
Vaishnaw said all telecoms reforms will be applied going forward and not retrospectively, which means the Indian carriers still have to settle billions of dollars in outstanding AGR payments to the government.
Vodafone Idea has paid the government 78.54 billion rupees (£772 million) in telecoms dues but still owes roughly 500 billion (£4.9 billion).
Bharti Airtel has said it paid dues estimated at 180 billion rupees (£1.7 billion) and government figures show it owes a further 259.76 billion rupees (£2.5 billion).
