Page 133 - SAMENA Trends - November-December 2019

REGULATORY & POLICY UPDATES SAMENA TRENDS

Indian Minister of Commerce and Industry Piyush Goyal The Indian government has approved a two-year
has warned that the government cannot intervene moratorium on spectrum payments, providing relief
in matters relating to the Supreme Court’s ruling on of around INR420 billion (USD5.9 billion) to the
Adjusted Gross Revenue (AGR). The Economic Times beleaguered industry. The cabinet greenlit the measure
India cites the minister as saying that the government cannot to defer collection of spectrum auction fees due from
service providers in the 2020-2021 and 2021-2022
take action on the issue ‘proactively or suo motu,’
adding that the state was nevertheless ‘in continuous fiscal years. Finance Minister Nirmala Sitharaman was
dialogue’ with the industry. The AGR issue is between quoted as saying that the deferred amounts would need
the Supreme Court and licensee holders, the official to be equally spread across the remaining instalments,
went on. As previously reported by TeleGeography’s without an increase in the time period for making
CommsUpdate, the ruling defined AGR – the figure the payments. Whilst the decision was welcomed by
on which India’s telecom licensee fees are based – to the nation’s cellcos, Telecom Minister Ravi Shankar
include revenue from sources unrelated to telecom Prasad poured water on hopes that the government
services. As such, the industry is facing a bill of around might soften its stance on the recent Supreme Court
INR1.47 trillion (USD20.7 billion), whilst non-telcos ruling on adjusted gross revenue (AGR), with the
that hold licenses are estimated to owe a further official stating that the ministry was not considering
INR2.28 trillion. Whilst Mr. Goyal was sympathetic to waiving the penalties or interest on the dues related to
the telco’s situation, he noted that government-backed the ruling. (November 21, 2019) The Economic Times
entities such as railway and gas firms RailTel and GAIL
and telco Bharat Sanchar Nigam Limited (BSNL) were India’s Department of Telecommunications (DoT) is
also facing substantial bills as a result of the court’s reportedly looking to apply the Supreme Court’s recent
decision. For its part, BSNL confirmed this week that ruling on Adjusted Gross Revenue (AGR) definitions
it has asked the Department of Telecommunications – on which certain license fees are based – to a
(DoT) to waive its AGR dues of around INR49.9 billion. wider array of firms that hold telecom licenses. The
The loss-making operator’s fees include a license fee ministry has sought a ‘legal opinion on the order’s
of INR21.0 billion and spectrum usage charges (SUC) wider ambit,’ and would pursue the matter once the
totaling INR28.9 billion. In a related development, applicability of the order has been clarified, noting that:
Telecom Minister Ravi Shankar Prasad has criticized ‘some companies likely to have been impacted by the
statements from Vodafone Group’s leadership that judgment might not even know that the DoT may raise
the telco may have to withdraw from the market if the demands and issue notices’. Firms potentially in the
government does not provide relief. Vodafone Group firing line include several utility and rail companies
is stakeholder in Vodafone Idea, one of the market’s such as GAIL, Power Grid Corporation of India, and
largest cellcos and one of the worst affected by the AGR RailTel, which hold licenses for a range of telecom
decision. ‘I don’t appreciate this kind of statement,’ the services. The apex court’s decision to define AGR as
official was quoted as saying, adding: ‘We have given the total revenue of the licensee, including income from
all the opening for doing business but no one should non-telecom activities could lead to the companies
dictate terms on us.’ Mr Prasad went on to say that incurring massive bills to the DoT, despite their limited
the ministry had done its best for the sector by offering involvement in the sector. A second official, meanwhile,
operators a longer period to pay for spectrum as well noted that several public sector companies could be
as a two-year moratorium on spectrum payments. facing substantial liabilities and as such: ‘This could
(December 17, 2019) commsupdate.com be a case of revenue going from one pocket of the
government to another’. The official suggested that an
New regulations covering mobile number portability exemptions could be made in these cases. In a related
(MNP) are set to come into force on 16 December, development, meanwhile, mobile providers Bharti Airtel
sector watchdog the Telecom Regulatory Authority and Vodafone Idea – the two cellcos most affected by
of India (TRAI) has announced. The measures were the AGR ruling – have announced that they will begin
introduced in December 2018 but implementation increasing tariffs from 1 December. Neither company
has encountered several delays, as the amendment revealed the extent to which prices would rise, or over
requires a ‘major shift in the mechanism for generating how long. The cellcos have, however, been arguing for
Unique Porting Code[s] (UPCs)’ but would result in a ‘rationality in pricing’ in the mobile sector, claiming that
faster porting process. Under the new regulations, the damaging price war launched in September 2016
operators must complete porting requests within the and a harsh regulatory environment have undermined
same circle within three days, or five days for inter- the financial health of the industry.
circle porting. The regulator noted that MNP will not (November 19, 2019) The Economic Times
be available for subscribers from 10 December to 15
December as companies migrate to the new system. The Department of Telecommunications (DoT) is
(December 4, 2019) telegeography.com reportedly challenging Bharti Airtel’s takeover of

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