India's federal cabinet on Wednesday approved a relief package for its telecom sector including a four-year moratorium on airwaves payments which are due to the government. The deferred payment cycle will begin from October 1, Telecom minister Ashwini Vaishnav noted. Vaishnav said that the government was changing the contentious definition of adjusted gross revenue (AGR) to count only the telecoms revenue. Until now, India had held that even companies' non-telecoms revenue was part of AGR, which led to a lengthy legal battle leading to a bill of $13 billion for wireless carriers.
All telecom reforms will be applied going forward, which means that Indian carriers will still have to pay the outstanding AGR payments to the government. The measures also include a four-year deferral in payments of AGR dues which will help Vodafone Idea get more time in paying the dues.
Sunil Bharti Mittal, Chairman, Bharti Airtel said, "We congratulate and thank the Government, who under the decisive leadership of the Hon'ble Prime Minister Shri Narendra Modi, has undertaken these seminal reforms to lift an industry that's at the core of his Digital India vision. The latest reforms ensure that the industry is able to invest fearlessly and support India's digital ambitions. We also compliment the Hon'ble Minister of Communications and the Hon'ble Finance Minister for their leadership and support."
Gopal Vittal, MD & CEO (India and South Asia), Bharti Airtel added, "For over two and a half decades, Bharti Airtel has pioneered India's telecom revolution. These fresh reforms will further boost our efforts to invest in this exciting digital future and enable us to be one of the leading players in India's digital economy. More needs to be done, however, towards a sustainable tariff regime to ensure the industry gets a fair return. This will, in turn, allow it to continue investing in new technologies and innovation to bring world-class services to customers."
Mukesh D Ambani, Chairman, Reliance Industries, said, "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."
(with inputs from Reuters)