It is no news that India’s telecom sector has been in trouble owing to a fierce price war and high duties and fees. But the quarterly results released last week have raised serious questions about the future of the sector and thousands of jobs. In the July-September quarter, the losses of four companies—Vodafone Idea, Bharti Airtel, Reliance Communications and Tata Teleservices—totalled up to around ₹1,06,444 crore. A big chunk of this amount is to make provision for payment to the government after the Supreme Court upheld the Department of Telecom’s definition of adjusted gross revenue (AGR).
AGR is the usage and licensing fee paid to the DoT by telecom operators. There was a dispute between the two parties on how to calculate the amount payable. The companies will now have to pay ₹92,642 crore to the government, which includes the original charges, interest and penalties.
“The sector is already reeling under a debt of around ₹4 lakh crore and is in dire financial straits as operators are making negative returns on their investments. The telecom EBITDA (earnings before interest, tax, depreciation and amortisation) continues to contract, while the interest expense of the industry continues to increase. With more than 1.19 billion subscribers, the sector is a key contributor to the Indian economy in terms of consumer benefit, employment and revenue generation, and contributes 6.5 per cent to the GDP,” said Rajan S. Mathews, director-general of the Cellular Operators Association of India. He said the taxes and levies in the Indian telecom sector, which range from 29 to 32 per cent, are among the highest in the world.
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A golden girl
One of India's most formidable beauties passed away earlier this month. The odd thing is she would absolutely hate this obituary; she hated being written about and avoided publicity for all of her nine decades. Indira Aswani was 93 when she died. But anyone who encountered her, even briefly, was in such awe of her grace and poise, and one could not but remember her forever.
The interest in wine is growing delightfully in India
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United in the states
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COVER DRIVE
Usage-driven motor insurance policies offer several benefits
GDP as the only measure of progress is illogical
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India is not a controlling big brother
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Comrade with no foes
Lal Salaam, Comrade Yechury-you were quite a guy!
Pinning down saffron
In her first political bout, Vinesh Phogat rides on the anti-BJP sentiment across Haryana
MAKE IN MANIPUR
Home-made rockets and weapons from across the border are escalating the conflict
SAHEB LOSES STEAM
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