New Delhi, Sep 15: Telecom biggies Reliance Jio and Bharti Airtel on Wednesday hailed the relief and reform package for the sector saying it will spur investment in digital infrastructure.
Providing major relief to telecom sector, the Union Cabinet today decided to offer upto 4 years of moratorium on adjusted gross revenue (AGR) and spectrum dues to telcos. It also approved change in the definition of AGR to exclude all non-telecom revenue on prospective basis.
In another bold step, the government has now permitted 100 per cent Foreign Direct Investment (FDI) in telecom sector.
Terming the policy measures as timely, Reliance Jio said that the government’s telecom sector reforms will encourage the company to bring newer and greater benefits to the customers.
Mukesh D Ambani, Chairman of 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.”
In a statement, Jio said that it has ensured that Indians have the highest quality and the highest quantity data access anywhere in the world, at the most affordable prices.
Another major player Bharti Airtel termed the telecom package as path-breaking policy which will support the telecom industry battered by unprecedented stress, high debt and low return on investments.
Bharti said that the reform package heralds a new dawn for the Indian telecom industry and will catalyse explosive growth of this vital sector. More importantly, it paves the way for a sustainable three private plus one state owned telecom operator structure to serve a large market like India, it noted.
Bharti Airtel Chairman Sunil Bharti Mittal said that the latest reforms ensure that the industry is able to invest fearlessly and support India’s digital ambitions.
“…what lies ahead is a once in a lifetime opportunity to build the digital infrastructure that is a catalyst for the digital aspirations of over one billion Indians,” added Mittal.
The telecom relief and reform measures are set to help struggling Vodafone Idea stay afloat.
Among the three private telecom players, Vodafone Idea Ltd (VIL) is facing existential crisis and their closure would mean duopoly in the industry besides a considerable bearing on its employees, subscribers, banks and associated industries.
“A four year moratorium has been given for all dues of telecom service providers,” Telecom Minister Ashwini Vaishnaw said announcing the telecom relief measures.
“It is also important to save government revenue, so an interest on the moratorium will have to be paid. This will reduce the stress of cash flow in the industry,” he said announcing a series of structural reforms in the Telecom sector.
Asked about the total cost of the package, the minister said it was “revenue neutral” for the government.
“We have to look at this reform from the perspective of this industry, the reforms are structural and they are going to make a difference. It is going to give a sustainable growth to the industry. The package is revenue neutral to the government, there is no number to the amount of the package,” he said.