Mobile towers let common people speak a thousand words every second. But it appears one more telecom operator will be silenced not only due to competition but largely due to revenue target laden bureaucracy demanding dues spanning years. Let us piece the puzzle together for understanding purposes.
India has the second largest telecom network in the world by number of telecom users and internet user base. It has one of the lowest call tariffs in the world enabled by mega telecom operators and hyper-competition among them.
Since the public launch of Reliance Jio in 2016, it offered stiff competition with various cost friendly schemes in mobile call rate and internet data thereby conquering the Indian market in a very short time. It forced competitors Idea, Airtel and Vodafone India Limited (VIL) following them. Other major players, namely Aircel, Tata Docomo and Reliance Communications (ADAG Group) were forced to shut shop. This also led to merger of VIL and Idea. It was felt that sooner or later Jio will increase monthly user charges. But even as on date the situation is same.
Competition eating into its profit not being enough, older telecom operators faced a massive liability towards Average Gross Revenue (AGR) dues from the Department of Telecommunication (DoT).
AGR is licence fee and spectrum charges payable in the form of ‘revenue share’ to the Centre. The bone of contention was whether revenue includes revenue earned from non-telecom sources such as deposit interests, rent, dividends, interest, miscellaneous income and profit on sale of assets. The slugfest between DoT and the telecom companies has been on since 2005. In 2015, the TDSAT ruled that the AGR included all receipts from non-telecom sources as well. In 2019, the Apex Court also affirmed the stand taken by DoT, leading to VIL’s accumulated debt towards Adjusted Gross Revenue (AGR) dues, deferred spectrum dues and other dues amounting to INR 1.80 Lakh crore. It seems one more telecom operator will meet its silent death.
Recently K.M. Birla stepped down as the non-executive chairman of VIL and has also shown willingness to give up his stake in the company to any public sector, government, or domestic financial entity, which can keep the company as a going concern.
NPowersU Expert Opinion
One more example of ‘justice delayed is justice denied’. Unfortunately laws enacted are unclear at the time of enactment. Later the bureaucrats sensing loss of revenue, issue notices to recover old dues leading the businesspersons to fight it out in the courts. Be it tax recovery by retrospective amendment to the acts (breather to Cairn Energy Plc and Vodafone India wherein recently one such amendment is withdrawn) or unclear wording and meanings in the Act further aggravated by delay in justice, it is loss-loss situation to businesspersons in India.
Just improving global ranking for ease of doing business in India is not enough. Even the Supreme Court is crying to fill up vacancies in various courts. However as on date, the Indian government has turned a blind eye.
May 75th Independence bless the Government with 75th Sense to put the house called ‘India’ in order.
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