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COAI wait for SC clarity on AGR, with thin duopoly possibility
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SME Times News Bureau | 17 Jan, 2020
While the telecom industry awaits with bated breath on the outcome of
their review petitions in the Supreme Court on the Adjusted Gross
Revenue (AGR) plea on Thursday, the possibility of a duopoly -- meaning
the exit of any operator though still hangs.
Though it has been substantially diminished following some steps taken recently by both the government and the industry.
"Lets
see what the SC says on AGR review pleas. Today as things stand, it
(the possibility of any operator exiting India) is minimal but it is
still there because of all these companies are public companies and they
are accountable to the public money invested.
"But Government
has told us it is not interested in a duopoly. Industry has hinted they
too are not interested in a duopoly. Something dramatic has to happen to
push through such resolves.
"However, three to four months ago, the picture was more bleak and there was much higher probability of someone exiting.
"Now
with the new tariff increases, proposed IUC (network connection
charges) staying in place and the consideration for a floor price,
operators today are seeing much more of positive dimension approaching
and support happening.
"All these would not have happened
without government support. The danger of duopoly has substantially
diminished and now it needs to be seen what comes out of the AGR
decisions and how it impacts the industry.
"Our understanding is
the DoT is keen to help, once the court clarifies. They have also given
the moratorium for spectrum dues payments," Rajan Mathews, Director
General of industry body COAI told IANS.
Mathews further said AGR
should now be abolished since there is upfront payment on spectrum
purchase and is high time to lower the licence fee and spectrum usage
charges to combine 1 per cent of the total revenue from 8 per cent.
Vodafone
Idea Ltd chairman Kumar Mangalam Birla had said that he might have to
stop operations if the company did not receive any relief from the
government following the Supreme Court order to pay dues of Rs 92,000
crore to the government related to the AGR issue from Airtel and VIL.
Voda Idea has to pay additional AGR liability at Rs 44,200 crore and
Airtel has RS 35,500 crore dues.
The Supreme Court will on
Thursday take up in-chambers the petitions seeking review of its verdict
on the AGR, which allowed Centre's plea to recover Rs 92,000 crore from
telecom companies.
A bench headed by Justice Arun Mishra and
comprising Justices S.A. Nazeer and M.R. Shah will consider the review
petitions of the telecom operators, though, Vodafone Idea and Bharti
Airtel had sought an open court hearing on their pleas. The current
deadline to pay the amount is January 23.
Anticipating the worst,
both the companies have raised funds to meet the liabilities. While
Airtel has raised $3 billion in debt and equity, Vodafone idea has
tweaked its Rights issue proceeds clause to be able to use the funds to
partly meet the statutory dues.
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