India's government bails out struggling operators with major telecom sector reform package
India's telecommunications sector has struggled for growth over the last five years. The sector's lacklustre performance has been in spite of concerted efforts by the government to bolster the underlying infrastructure in a bid to achieve universal coverage. Instead, the country's relatively liberal regulatory environment has encouraged fierce competition and price wars amongst the operators, driving down ARPU to the point where many are now more concerned about their mere survival rather than generating positive returns for their shareholders.State-owned as well as private operators have been forced to seek redress from the government in order to avoid bankruptcy. One particular area of contention has been the billions owed by the operators to the government in the form of Adjusted Gross Revenue (AGR) dues and usage and licensing fees charged by the Department of Telecommunications (DoT) and that have been the subject of long-standing court battles over what should be counted as revenue.
The government won that battle in the Supreme Court in 2019, but the financial impairment of that decision has pushed a number of telcos and in particular Vodafone Idea and to the brink. Add the impact of the COVID-19 crisis in 2020 and 2021 to the mix, and the government had to come to the industry's rescue by introducing a major reform package in September 2021. Along with changes to the definition of AGR with regard to non-telecom revenue, the package includes a four-year moratorium on AGR dues and spectrum instalments.
Coincidentally, the government has also deferred the spectrum auctions for 5G until later in 2022. Mobile spectrum in India is already in short supply in terms of providing the necessary capacity to reach universal coverage, but the cash-strapped MNOs may not yet be in a sufficiently strong financial position for which to make the 5G spectrum auction viable.
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Table of Contents
- Key statistics
- Regional Asia market comparison
- Market characteristics
- Market Leaders
- Market Challengers
- Market Emergents
- TMI vs GDP
- Mobile and mobile broadband penetration
- Fixed versus mobile broadband penetration
- COVID-19 and its impact on the telecom sector
- Economic considerations and responses
- Subscribers
- Infrastructure
- Telecommunications market
- Regulatory environment
- Regulatory authorities
- Ministry for Communications (MoC)
- Department of Telecommunications (DoT)
- Telecom Commission
- Telecom Regulatory Authority of India (TRAI)
- Telecom Dispute Settlement & Appellate Tribunal (TDSAT)
- Communications Commission of India (CCI)
- Ministry of Electronics and Information Technology (MeitY)
- Fixed-line developments
- Licensing circles
- Licensing - VNOs
- Net Neutrality
- Interconnect
- Fibre access
- Mobile network developments
- Spectrum
- Mobile subscriber verification
- Interconnection
- Mobile Number Portability (MNP)
- Mobile market
- Urban versus rural divide
- Mobile infrastructure
- 5G
- 4G/LTE
- CDMA
- Other infrastructure developments
- Mobile broadband
- Major mobile operators
- Bharat Sanchar Nigam (BSNL)
- Bharti Airtel
- Mahanagar Telephone Nigam (MTNL)
- Vodafone Idea
- Quadrant
- Reliance Communications (RCOM)
- Reliance Jio Infocomm (Jio)
- Tata Teleservices (TTSL)
- Reach Mobile
- MVNOs
- Fixed-line broadband market
- National Broadband Plan
- Fixed broadband ISPs
- Bharat Sanchar Nigam (BSNL)
- Bharti Airtel
- Hughes Telecom
- Mahanagar Telephone Nigam (MTNL)
- Atria Convergence Technologies (ACT)
- Vodafone Idea
- Reliance Jio
- Fibre-to-the-Premises (FttP) networks
- Hybrid Fibre Coax (HFC) networks
- Digital Subscriber Line (DSL) networks
- Other fixed broadband services
- Wi-Fi
- Digital economy
- e-Payments
- Fixed network market
- Major network operators
- BSNL
- Bharti Airtel
- MTNL
- Quadrant
- Reliance Communications
- TATA Teleservices
- Vodafone Idea
- Telecommunications infrastructure
- National telecom network
- Universal Service Obligation Fund (USOF)
- BharatNet / National Optical Fibre Network (NOFN)
- Public Call Offices (PCOs)
- International infrastructure
- Submarine cable networks
- Satellite networks
- Data Centres
- Smart infrastructure
- IoT
- Glossary of abbreviations
- Related reports
List of Tables
List of Charts
List of Exhibits
