Vodafone Idea, Bharti Airtel chiefs call for floor price, lower taxes to help restore telecom industry's financial health

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Lower taxation and floor price can help restore the financial health of debt-ridden telecom companies, industry experts said on September 18.

Speaking at the ET Telecom Digital Telco Virtual Summit, Vodafone Idea CEO Ravinder Takkar said in the wake of AGR verdict, it is important that the National Communications Digital Policy 2018 is speedily implemented. "Though this can only happen through a light-touch regulatory approach, along with lower taxation levels for the industry," Takkar said.

At present, the financially stressed industry pays more than Rs 30 of every Rs 100 earned toward telecom levies and taxes, as per an Economic Times report.

Bharti Infratel Chairman Akhil Gupta said setting a floor price as a temporary measure can help restore the financial health of the industry. "A floor price should be fixed at least for the next three to four years. Post that, as things settle down, it can be taken off," he said during the summit.

Gupta said either telcos have to self-regulate or the regulator will need to step in to ensure there is no predatory pricing in this industry.

"Even when we are down to three private operators, I still see that trend continuing. We all keep saying that the current tariffs and the current average revenue per user (ARPU) are completely unsustainable. But we do not end up increasing the tariffs or thereby increasing the ARPUs," Gupta said.

Bharti Airtel’s chief executive Gopal Vittal called on the government to expedite policy measures to bring in affordable and easy access to connectivity. "The most critical requirement for Digital India is easy and affordable access to the right of way (RoW) so that we can reach customers and give them services they deserve,” Vittal said during the virtual event.

The government on September 17 said telecom companies owe more than Rs 1.4 lakh crore as outstanding adjusted gross revenue (AGR) dues.

The companies owe a combined Rs 143,271.74 crore, the Ministry of Communications said in a reply to a question in the Rajya Sabha. While Vodafone Idea owes Rs 54,754 crore as AGR-related dues, Bharti Airtel has an outstanding payment of 25,976 crore.

The Supreme Court on September 1 allowed telecom companies to pay their balance AGR dues over the next 10 years. The top court also asked for an upfront payment of 10 percent of the dues by March 31, 2021.