Duopoly in telcom will hurt both consumers and govt

Source: Business Standard

What is the news?

The government is reportedly looking at a relief package for the stressed telecom sector while also exploring ways to allow operators to pay their dues linked to adjusted gross revenue (AGR) over 20 years rather than 10 years currently.

Must Read: Two is too few – Issues with telecom sector

Preventing a duopoly in the telecom sector is crucial for a large country like India. Hence, the need for a relief package is evident. Further, the following steps can be taken,

Steps needed:
  • The DoT (Department of Telecommunication) must revisit the components of AGR, which includes interest income, dividend, profits on the sale of assets, insurance claims, and forex gains.
  • The reserve price for the upcoming 5G spectrum auction should be rationalized to a level that would prevent telcos from any further bleeding.
  • Telecom companies must rationalize their tariffs without TRAI’s interference. Small beginnings have been made by telcos in the post-paid segment, but to make a real difference in their financial health, they need to ask the larger universe of pre-paid telecom users to shell out more for the services.

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