Competition in telecom sector vital for Consumers

Smart Governance, March  22, 2020

Voices are now being raised in unison by different stake-holders for a soft attitude by the Supreme Court in payment of Adjusted Gross Revenue (AGR) dues by the telecoms.

While the Government by proposing staggered payment of adjusted gross revenue (AGR) dues over 20 years period is protecting whatever little competition has remained in telecom sector, the Supreme Court seems to be unrelenting to the larger issues looming the economy, including job losses and consumers interest” said CUTS International Secretary General Pradeep S. Mehta.

Mehta was commenting on the Supreme Court’s inclination to be determined on its October decision on AGR issue and the directions on payment to be made by the affected telecom operators.

While telecommunications companies had offered to pay up on the basis of their own estimates, the Supreme Court was not impressed with the telecommunications companies for trying to self-assess the amounts owed to government; the results fell well short of the DoT’s original estimate.

“It is hoped that the Court, while it is right, could seriously consider the Central Government’s proposal of staggered payment in its next hearing”, observes Mehta. “The higher courts should be sensitive to economic and consumer impact that their judgements could ensue,” he added.

DoT requests that AGR dues payment be spread over 20 years were also dismissed, not too surprisingly since the DoT itself had pressed for the original judgement last year, when the Supreme Court upheld the government’s position on including revenue from non-core businesses in calculating the annual AGR of telecommunications companies. This decision significantly boosted the amount owed.

“Functioning of all the four telecom operators is vital for healthy competition in the telecom sector” said Mehta fearing probable exit of a major player Idea-Vodafone.

“Given that public sector firms in the telecom sector are nearly decimated as it is, the impact of Supreme Court’s decision will be a gargantuan fall in the sector which cannot be contained by other players in their current capacity” stated Mehta.

*CUTS is a leading consumer organisation and a global public policy think tank inter alia also involved in assessing economic impact of judicial decisions.

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