Relief at last for India’s operators?

Relief at last for India’s operators?

Not surprisingly, in the wake of a recent court ruling against India’s operators, the financial pressures on the sector have continued to make headlines. Now a review of those financial pressures has been mooted.

According to reports in the Indian press, the Indian government’s Committee of Secretaries will take a closer look at the situation following the Supreme Court ruling.

However, even before the ruling, which has required the country’s operators to pay the government a total of $13 billion in outstanding airwaves and license fees, operators had been making public their worries about the strains on the sector. Not only are spectrum auctions and 5G on the way, with all that implies in terms of investment, but ARPU has declined and aggressive competition, led by the relatively new entrant Reliance Jio, has caused problems for Vodafone Idea and Bharti Airtel in particular.

Both companies had in fact been particularly vocal about financial pressures well before the ruling. Now Vodafone Idea has been asked to pay around $4 billion and Bharti Airtel $3 billion by the Supreme Court.

News reports suggest that the committee will consider deferring spectrum auction payment for the years 2020-21 and 2021-22. At the same time the Universal Service Obligation Fund (USOF), a charge meant to fund rural telephony in the country, may be discussed, including a proposal to cut the USOF charge to three percent from the current five percent. A look at the minimum charge for voice and data services and the reduction of spectrum usage charges may also be included in the review.

It is not yet clear, however, when the review will happen, let alone when any recommendations will be effected.

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