The Indian government is exploring ways, like out-of-court settlements, to bring down the number of legal cases it is embroiled in with service providers.
In a groundbreaking move, the Indian government is exploring ways, such as out-of-court settlements, to bring down the number of legal cases it is embroiled in with service providers.
In addition, central government is also looking for ways to do away with the existing spectrum usage charge (SUC), according to media reports.
These issues have been highlighted by industry leaders, including Bharti Enterprises Chairman Sunil Bharti Mittal. The measures are seen as the second part of reforms to these and other longstanding demands on the industry.
Figure 1: Happy endings? Just like in all the romcoms, the Indian government seems to have realized it doesn't hate the telecom industry after all – at least until the sequel.
(Source: Markus Winkler on Unsplash)
The new telecom minister, Ashwini Vaishnaw, announced the much-awaited changes in September, effectively saving Vodafone Idea. India's third-largest service provider was on the brink of closure.
The reforms include deferred payment of adjusted gross revenue (AGR) dues, prospective SUC abolition, reducing the number of bank guarantees and allowing telcos to convert dues and interest into government equity. Several factors, including AGR, have led to a massive increase in the industry's debt, impacting its overall health.
All rise
There are various ongoing cases involving the industry and service providers. The tax issue, which has been going on for years now between the administration and Vodafone, is just one example. The AGR case went on for 15 years before the Supreme Court announced the verdict in 2019.
There is a possibility that the government will adopt something similar to Vivaad se Vishwas (loosely translated as "dialogue for building trust"), a program launched in 2020 to reduce income tax-related litigation.
One of the key reasons for so many legal cases is the complicated nature of the regulations, which are usually open to different interpretations. Added to this, court cases can go on for years in India, and they often do.
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The recent reforms possibly reflect a change in government's attitude towards the Indian telecom industry.
A popular industry joke is that spectrum auction comes to the rescue of the government every time it is short of funds. If they come through, these measures would mean it is serious about resolving the industry's issues – a good place to start making a change in the relationship between industry and the administration.
After decades of never-ending legal fights between the Indian government and the industry, it almost sounds too good to be true.
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— Gagandeep Kaur, contributing editor, special to Light Reading
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