telecom | IST

Expect government to give some relief to telcos: Prabhudas Lilladher

Amnish Aggarwal, head of research at Prabhudas Lilladher, believes that there is room for the government to give some leeway to the telecom companies so that India has at least three telecom players in the longer-term.

The Union Cabinet is likely to consider relief for the telecom sector today. This is, in essence, a make or break moment for Vodafone, which is saddled with total liabilities of nearly Rs 2 lakh crore including dues of more than Rs 50,000 crore in adjusted gross revenue (AGR).
Amnish Aggarwal, head of research at Prabhudas Lilladher, believes that there is room for the government to give some leeway to the telecom companies so that India has at least three telecom players in the longer-term.
“Telecom today is a much broader play and not just the instrument to call. It is the data, e-commerce, so the dependence of the entire economy on telecom is much more. So keeping that in view, and the fact that today if the economy has to grow, there has to be a vibrant telecom data market, including the quality of data and penetration - so at some point of time, in order to propel the economy, the government might look at giving some relief to the telecom companies,” he said.
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According to him, there are only two ways in which the companies can remain in green and grow in the longer-term and also ensure the upcoming capex on 5G.
“One is you increase your average revenue per user (ARPU) gradually and the second way is that the government levies should come down,” he added.
He believes, the easier way out would be – reduction in levies, some spectrum usage charges and other stuff, which is purely an executive decision and it doesn’t come in conflict with the Supreme Court of India’s verdict.
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