India’s Telecom Industry Gets A Government Lifeline

The Cabinet today approved a set of deep-relief measures for India’s telecommunications industry, that has in the past decade narrowed to just three players — Bharti Airtel Ltd., Reliance Jio and Vodafone Idea Ltd. — with the last in deep distress.

In a media briefing telecom minister Ashwini Vaishnaw made the following announcements on AGR, spectrum, foreign direct investment and a moratorium on dues to government. Together these will give the companies a financial breather even as they make efforts to increase pricing and improve average revenue per user.

Adjusted Gross Revenue

– Definition of AGR for telecom companies will be rationalised.

– Non-telecom revenue will not be included in AGR.

– The judgment had said no past assessments should be done.

– Any AGR definition changes will be prospective and be applicable from an appointed date.


– Telecom companies to get 4-year moratorium to repay dues to the government.

– The moratorium for telecom industry will kick in from Oct. 1.

– Those who avail of the option will pay interest on the moratorium amount.

– All dues, including AGR and spectrum-related dues, will be covered under the moratorium.

– Interest will start accruing from Oct. 1 and the payment will be at the end of the year.

– The government will not bear any cost for the telecom moratorium, said the minister.

– Government will have the option to convert dues into equity after 4 years.

– A call will be taken based on the circumstances then.

Stress in the telecom industry will now be resolved with this decision, Vaishnaw said.


– Spectrum holding duration to be extended to 30 years from 20 years currently.

– Spectrum can be surrendered after 10 years in case of technology change.

– Telecom auction will be mostly be done in the last quarter of the financial year.

Vaishnaw said the government wants to promote healthy competition in the telecom sector.

Foreign Direct Investment

– 100% FDI in telecom will be allowed through automatic route, up from 49% allowed right now.

Watch the media briefing after the cabinet meet.

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