The Supreme Court’s decision to ask two major telecom players, Bharti Airtel and Vodafone Idea, to settle their payments related to the AGR (Adjusted Gross Revenue), may have grave implications for the very structure of the telecom sector. As there was ambiguity over what constitutes ‘AGR’, the Union government should have reconsidered its stated and unreasonable position that revenues from non-telecom activities be part of the calculations. Rather than taking a fresh approach towards the existing licensing regime and statutory levies, considering the difficulties being faced by telecommunication companies, the Union government hopes to extract ₹1.33 lakh crore from the telecom sector in 2020-2021. Vodafone Idea had already expressed its inability to continue as a going concern. Closure of Vodafone Idea and the resultant duopoly-like situation, with one dominant player setting the rules, would definitely lead to a loss in terms of consumers’ welfare. Besides ensuring a semblance of policy stability and predictability, the Union government needs to take concrete steps to overhaul the existing licensing regime.
M. Jeyaram,
Sholavandan, Tamil Nadu