Redefine Adjusted Gross Revenue, Say Industry Experts

Industry experts believe the decision for spectrum payments to be deferred to 2020-21 and 2021-22 is a boost for the near term cash outflows.

After the government decided to defer spectrum payment for telecom firms by two years, the spotlight shifted to the market mood and whether investors would cheer this decision, however one witnessed a muted response towards shares of Vodafone Idea and Bharti Airtel on the stock exchanges.

Industry experts believe the decision for spectrum payments to be deferred to 2020-21 and 2021-22 is a boost for the near term cash outflows, however the telecom industry is battling several issues.

Sanjay Kapoor, Former CEO of Bharti Airtel feels "any step which gives telcos a relief on cash flows is a welcome move, however if the government can do anything on adjusted gross revenues by reducing penalties , it will certainly be a welcome move".

Rajan Mathews, director general of Cellular Operators Association of India said "We request the Department of Telecom to prospectively redefine Adjusted Gross Revenue in line with the TDSAT ruling and reduce license fee and spectrum usage charge to 3 per cent and 1 per cent respectively. We believe this will also be required to return the industry to financial health.

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