Government working on measures to improve telecom-sector

The government is considering some long-term measures focus to improve the health of the telecom-sector, which is burdened with the debt. The measures include redefining adjusted gross revenue (AGR) which will exclude ‘non-telecom’ items and permitting telcos to give back unused spectrum for small amount of penalty.

Phasing out Bank Guarantees, reducing License fees (LF) and spectrum usage charges (SUC) are also included in the long term measures. According to the officials, the measures would require discussions with Ministry of Finance as some measures expected to impact the revenue. An official said, “A fresh definition for AGR excluding all non-telecom revenue could actually help clear all the doubts and grey areas which have been a bone of contention between the telcos and the government.” SUC and LF are paid on the basis of AGR thus a lower AGR will imply lower related levies.

Another official said that the reform under which telcos can surrender unused spectrum at small penalty will help the companies in making speedy profitable decisions. He said, “In such a scenario a telco isn’t forced to keep paying instalments to the government for the entire 20-year period and will make a telco more agile and speedy in making profitable decisions.”