Centre mulling ‘tariff revision to save the telecom sector’

S Ronendra Singh New Delhi | Updated on February 24, 2020

Govt/TRAI to decide on floor price

A sustainable growth model for the telecom sector appears to be in the works, with the government considering revisions to tariff structure.

“Tariff rate is being discussed and in the process... expectations are that it will be fast tracked,” a source in the government told BusinessLine.

This is to mitigate the effects of the AGR (Adjusted Gross Revenue) issue that has impacted telecom operators and also slowed the 5G implementation process. Indications are that another revision of tariff structure is in the pipeline, as the government believes that this only can bring back the sector’s golden days.

Althoughthis may impact consumers in the mid-to-long-term, the balance-sheets of the telcos can improve, especially of incumbent players like Vodafone-Idea and Bharti Airtel, which would be able to clear their statutory dues like the licence fee and spectrum usage charges.

The official said that it was painful to see that the larger reforms that were expected in the sector have been pushed aside and delayed because of the AGR issue. According to the source, an implementable solution is in the pipeline and waiting for the go-ahead from higher authorities.

“The larger thinking of the government is that the telecom sector needs to be resurgent in which not only the government, but these companies also have to play their role,” the official said.

Sources said that Telecom Minister Ravi Shankar Prasad had also met TRAI Chairman RS Sharma along with Telecom Secretary Anshu Prakash recently to discuss these issues as it is believed that there is a commitment from the ‘higher authorities’ to make the sector viable.

Such a step would foremost help Vodafone-Idea, which has the highest AGR dues.

The Telecom Regulatory Authority of India, in December, put out for comments a consultation paper, ‘Tariff Issues of Telecom Services’ that seeksg views on fixing a floor price for voice and data services so as to improve the average revenue per user for the telcos. Stakeholders are to file comments by February 28 and counters by March 13.

Meanwhile, the government on Monday asked telcos to submit AGR self-assessment documents that form the basis of their statutory dues calculation. All three telecom companies Bharti Airtel, Vodafone Idea and Tata Teleservices have been asked to provide substantiating documents, too.

Published on February 24, 2020

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