Indian Government Announces Relief Measures for Telecom Sector, Airtel and Reliance Jio React

The Indian Government has announced several measures to strengthen the cash-strapped telecom sector. The relief measures announced by the Cabinet have been appreciated by Airtel and Reliance Jio who have stated that these measures are a timely step towards strengthening India’s telecom sector, and also will accelerate the Digital India vision and enable India’s transformation into the world’s leading Digital Society.

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 Hon. Prime Minister for this bold initiative.”

Bharti Airtel , on the other hand, welcomed the policy directions and interventions announced by the Government of India to support the telecom industry that has been battered by unprecedented stress, high debt and low return on investments. Sunil Bharti Mittal, chairman, Bharti Airtel said: “We congratulate and thank the Government, who under the decisive leadership of the 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 Minister of Communications and the Finance Minister for their leadership and support.”

Next generation telecom networks with technologies such as 5G will be the spine that will support India’s digital ecosystem and spur economic growth. A healthy telecom industry will also spur innovation and investments in allied industries like network equipment, smartphones, data centers, etc. and help create large number of jobs and contribute to India’s Atmanirbhar vision, said Airtel.

Gopal Vittal, MD and 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 continue investing in new technologies and innovation to bring world-class services to customers.”

Highlights of the Reforms Announced for Telecom Sector

Some of the highlights announced by Ashwini Vaishnaw, Minister of Communications, Government of India are as follows:

• Licences under 1953 Customs Notification for wireless equipment have been removed, and replaced with self-declaration.
• Moratorium or deferment of up to 4 years in annual payments of dues arising out of the AGR judgement or Spectrum Payments. Net present value will be protected.
• 100% FDI through automatic route in the Telecom Sector has been approved. All safeguards will apply.
• Rationalization of Adjusted Gross Revenue (AGR): Non-telecom revenue to be excluded on prospective basis from AGR.