Vodafone Idea and Bharti Airtel shares rose in commerce in the present day amid reports the federal government has constituted a panel to work out a bailout package for the telecom sector. While Vodafone Idea share zoomed 8.57 per cent to Rs 4.18, Bharti Airtel inventory additionally gained 3.13 per cent to Rs 371.20.
Vodafone Idea inventory has fallen 40.06% in final 6 days.
Reports say the panel has been requested to look at “all aspects” of “financial stress” confronted by service suppliers similar to Bharti Airtel and Vodafone-Idea and recommend measures to mitigate them.
The Committee of Secretaries (CoS), which is able to comprise secretaries to the ministries of finance, regulation, and telecom, will even look into different points similar to delay in spectrum public sale cost dues for FY21 and FY22 and telcos’ long-pending calls for of a discount in spectrum utilization fees and common service obligation fund levy.
Telecom Regulatory Authority of India (TRAI) can also look into the demand for a discount within the minimal cost (flooring tariff) for voice and knowledge providers.
The want for a bailout package has arisen after the Supreme Court allowed the federal government’s plea final week to get well adjusted gross income (AGR) of Rs 92,000 crore from telecom service suppliers.
Also learn: About 40,000 telecom jobs in danger after SC verdict places Rs 92,600 crore burden on sector
On October 24, 2019, the Supreme Court upheld the federal government’s plea on its interpretation of Adjusted Gross Revenue (AGR). A bench of justices Arun Mishra, S Abdul Nazeer, and MR Shah held that almost all income elements, “except one or two”, would fall inside the Department of Telecommunications’ (DoT) definition of AGR, thereby ending over 14 years of authorized battle between the Centre and the telecom corporations.
After the rejection of attraction towards the definition of AGR, telecom corporations would now have to pay over Rs 92,000 crore to the DoT. The SC stated it will later repair a time schedule as to when the telecom corporations have to pay the quantity.
In a submitting within the apex court docket in August, the DoT had requested telcos to pay up Rs 92,641 crore on account of license charges and spectrum utilization fees (SUC), that are selected the premise of AGR. AGR is calculated on the premise of spectrum utilization fees and licence charges payable by telecom corporations. The telecom corporations are liable to pay round 3-5 per cent of AGR as spectrum utilization fees and eight per cent of the AGR and licence charges.
By Aseem Thapliyal