Telecom company's may get more Relief by reduction of licence fees

Good News For Indian Telecom sector Players: Vodafone !dea, Airtel, Jio, Bsnl, and Mtnl

Vodafone !dea, Airtel, Jio, Bsnl, and Mtnl
TRAI  Update
Latest Announcement: Indian Govt is planning to shortly reduce the license fees of telecom company's: it may be slashed from 8% to either 5% or 6%; move may save  ₹4,000-5,000 cr a year.
its good news for the telecom sector.

It would be a second good step to revive the high debt sector by the Govt of India. as we know industry struggling with high debt and intense competition after coming of Reliance JIO which has dragged revenue and profitability of the Telecom Industry.

According to sources, the meeting of two senior government officials, at the highest levels of the government is scheduled for this week to discuss scaling down the license fees, experts say, this move will save the three telecom sector a combined ₹4,000-5,000 crore annually.


Market Experts says the by this move also some of the telecom like Bharti Airtel And Vodafone !dea does not get much relief as of now because still, they have to pay the Amount of AGR (average Gross Revenue) With is  Rs 35,500 crore and Rs 53,000 crore, respectively of Airtel and Vodafone.

 A person aware of the matter said that once a decision is taken, it will be sent to the Cabinet.

This move is to be taken because the Committee of Secretaries (CoS), which was set up to give suggestions to improve the health of the sector, last month recommended a reduction in the license fee paid by telecom players and allowing a two-year relief time to on spectrum payments. While the moratorium was approved by the Cabinet, giving a relief of Rs42,000 crore to the private telecom players, the license fee reduction issue is being taken up now as a next step to help them more.

Reduction of AGR in More Detail:

The Universal Service Obligation Fund (USOF)  a part of license fee could have chances to cut 3% or 4%, from 5%, and the Main license fee component to 2% from 3%, said one of the people aware to matter. Universal Service Obligation Fund (USOF) comprises 5% of the 8% of AGR that telecom company's pays as license fees annually to the government.

Telecommunication companies annually pay around 8% of their adjusted gross revenue (AGR) as license fees to the government. The telecom industry has been long calling for a reduction in that fee as well as in the spectrum usage charge (SUC), which is paid at 3% to 5% of AGR to the Government.

Industry Analysts said if this license fee got reduced to 5%, Airtel will save around Rs 2,000 crore, Jio will save Rs1,500 crore and Vodafone Idea around Rs 800 crore in the next fiscal year starting April 2020.

Now What Happened To The AGR Matter :

The Indian government has said it won’t be able to give any relief to Telecom Sector on the AGR dues unless the court directs it. Both Airtel and Vodafone Idea have filed limited review petitions in Court, but they haven’t been heard as yet.

Mr.Prashant Singhal, global tech, media, and telecom markets leader at EY, said that AGR is a bigger concern and industry is “hopeful if the top court looks into the review request of AGR Dues put By Airtel And Vodafone To get a Relief.

That All Efforts May Put Telecom Into a Positive Paths : 

  1. Increase In Plans Price To increase The ARPU Average Revenue Per User.
  2. After Hikes In Plans, Experts Say That ARPU may Cross Rs.200 After some time.
  3. Airtel Chairman Said That They need Rs.300 ARPU Soon To See sustainability In Sector.
  4. TRAI Telecom Regulatory Authority OF India Said After Requesting Of telecoms hey may fix a minimum floor price of pans to help telecoms to remain in the competition.
  5. And now the latest news that in future telecom may get some reduction in prices.
 AFTER ALL ANNOUNCEMENTS AT LAST THE USER. END CONSUMER WILL SUFFER from HIGH BILLS IS TERRIFIC HIKES IS THE ONLY SOLUTION WE DONT THINK SO. FOR A MIDDLE MAN ITS VERY TOUGF TO RECHARGE ALL THEIR FAMILY USERS WITH Rs.300 A MONTH AND WHAT ABOUT THE QUALITY OF SERVICES it's NOT ACTUAL 4G WHICH EVERYONE GET GET EVERY WARE 

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