Not long ago, the government’s persistence to extract long-standing AGR dues caused India’s telecom industry to be at a standstill. As every telecom company was in survival mode, no one could think about innovation at this stage. It wasn’t until the Supreme Court decided to put a 4-year moratorium on the demand that telecom companies finally had time to sit back, relax and contemplate.
The last three words feel more like wishful thinking rather than facts. Because even though the new norms about AGR did bring some relief to telecom companies, not everyone would survive.
In this article, we take a realistic look at the impact of the new norms on the telecommunication sector.
First, let us talk about all the good this decision will bring. We all know that the outstanding demand for the license fee is huge – probably more than the GDP of many small nations. Therefore, we can safely say that the decision to put a stop to this demand, for the time being, has created the right impact.
Regardless of the intention of the decisions, some of their impacts are not that positive for the industry.
Many telecom companies, especially those already spread across the whole country – have an indifferent response to the AGR. It became evident after Reliance Jio came and said that they are relinquishing their right to use the four-year moratorium. Of course, it was expected for such a large company.
Moreover, in the case of Vodafone-Jio, the one company that truly struggled to gripe with AGR Telecom dues, soon got help from the government of India, which now owns 35.8 % of the company’s stakes.
One can say that the established players in the telecom sector – one that is defining this generation of telecom services – are more or less indifferent about the new changes.
The change in AGR Return Filing norms brought about many changes for the telecom industry and not all of them for the better. While we can’t ignore the positive changes, we can’t look past that these norms came too late. However, these changes make us hopeful for the future of the telecom industry, as while the small telecom companies have been forgotten, the up and comers can carve their niche because of these relaxations.