Telecom Industry / Jio-Airtel's dominance will be broken, the government has made a plan of Rs 1 lakh crore

The government is working on a relief plan of Rs 1 lakh crore to save Vodafone Idea in the telecom sector. There is a plan to waive 50% interest and penalty on AGR dues. Its announcement is likely in Budget 2025. This will increase competition in the industry.

Vikrant Shekhawat : Jan 19, 2025, 06:00 AM
Telecom Industry: The government is preparing a major economic package to break the dominance of Reliance Jio and Airtel in the Indian telecom industry. This step will not only provide relief to distressed companies like Vodafone Idea, but is being taken with the aim of providing stability to the entire telecom sector.

What is the government's plan?

According to sources, the government is planning to give a huge discount on Adjusted Gross Revenue (AGR) due to telecom companies. This discount includes a proposal to cut interest by 50% and waive the penalty completely. This step is being taken with the aim of giving financial relief to telecom companies and increasing competition.

The AGR issue came into the limelight in 2019 after the Supreme Court order, which directed telecom companies to pay dues of Rs 1.47 lakh crore. This amount was in the form of license fees and spectrum charges.

Vodafone Idea benefits the most

If this proposal of the government is approved, then the telecom sector can get relief of more than Rs 1 lakh crore. Vodafone Idea will be the biggest beneficiary of this, which is expected to get relief of more than Rs 52,000 crore. This amount is in the form of AGR dues, which had put the company in serious financial crisis.

Relief to Airtel and Tata Teleservices too

Bharti Airtel, which is in a financially strong position, is also expected to get relief of Rs 38,000 crore from this proposal. At the same time, Tata Teleservices, which has discontinued its retail services, can benefit by about Rs 14,000 crore.

Reliance Jio, which is a major player in the telecom industry, has no AGR dues. This means that this relief can directly put companies like Vodafone Idea and Airtel in fresh competition.

A big announcement can be made in the budget

According to sources, high-level discussions are going on between the Ministry of Finance, Department of Telecom and the Cabinet Secretariat to implement this proposal. It is likely that this scheme may be announced in the upcoming budget (February 1).

Will there be a big change in the telecom industry?

Since the launch of Jio in 2016, competition in the telecom industry had increased tremendously, due to which many companies had to shut down their operations. After the order of the Supreme Court, the AGR dues further aggravated the crisis.

This move of the government will not only help in bringing financial stability, but will also give companies like Vodafone Idea and Airtel a chance to compete afresh.

Will the dominance of Jio and Airtel break?

This relief package will give Vodafone Idea an opportunity to improve its services and increase its market share. Airtel will also get relief from its financial burden, allowing it to accelerate its 5G network and other services.

However, given the market position and strong consumer base of Jio and Airtel, Vodafone Idea will have to make extra efforts to strengthen its position.

Conclusion

This proposal of the government can prove to be a game changer for the Indian telecom sector. While on the one hand it will pull the companies out of financial crisis, on the other hand it will help in providing better services to consumers by reviving competition. Now all eyes are on Budget 2025, where this relief scheme can be formally announced.