News Brief
Vodafone Idea, Jio And Airtel Hail Modi Govt's Reforms In Telecom Sector
Logos of India's telecom - Airtel, Jio and Vodafone Idea
India's major telcos have hailed the reform measures announced by the government to help the stressed telecom sector.
The Modi cabinet on Wednesday (15 September) approved a number of structural and process reforms in the telecom sector including a four-year moratorium on spectrum and Adjusted Gross Revenue (AGR) payments.
The government decided to remove non-telecom revenues from the AGR definition, which will save tax outgo on spectrum usage charge and licence fee in the future. It also cut the bank guarantee mandate against licence fee and other similar charges by 80 per cent and said there will be no requirement for multiple bank guarantees in different service areas.
Further, to encourage investment, the government also approved 100 per cent Foreign Direct Investment (FDI) under automatic route in the telecom sector.
Responding to the reform measures announced by the government, Vodafone Idea promoter Kumar Mangalam Birla said that the reforms "will go a long way in unshackling the telecom sector".
"These reforms will bring alive the digital aspirations of 1.3 billion people and accelerate India's journey to be a digitally powered economy," Birla added, reports Economic Times.
It should be noted that the reform measures would give the biggest breather to cash-strapped telecom player Vodafone Idea (Vi). The company has to pay about Rs 50,399.63 crore in statutory dues dating back over the past many years.
Meanwhile, Bharti Airtel Chairman Sunil Bharti Mittal hailed the government's move and said that the reforms will "ensure that the industry is able to invest fearlessly and support India’s digital ambitions".
Reliance Industries' chairman and Jio founder Mukesh Ambani also welcomed the government's telecom sector reforms announcement.
“Telecom sector is one the prime movers of the economy and the key enabler for making India a Digital Society, I welcome the Government of India’s announcement of reforms and relief measures that will enable the industry to achieve the goals of Digital India. I thank Honourable Prime Minister for this bold initiative," Ambani said, reports India Today.
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