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SC ruling on AGR will lead to telcos’ collapse: Ficci writes to Sitharaman

FE Bureau
Finance Minister Nirmala Sitharaman, nirmala sitharaman

Industry body Ficci has sought intervention of finance minister Nirmala Sitharaman to address the issue of telecom sector and save it from brink of collapse.

A letter dated November 27, written by Ficci president Sandip Somany to Sitharaman, said the sector is saddled with massive debt (estimated to be over Rs 7 lakh crore) and has almost no appetite to invest in networks and future technologies.

"Adding further woes to the sector, the recent ruling on the adjusted gross revenue (AGR), dues to the TSPs (telecom service providers) will lead to an unfortunate and disastrous collapse of the already battered sector," the letter said.

It further added that this ruling will have a cascading effect and will severely impact many other companies in multiple sectors such as internet service providers, satellite communications providers, cable operators and even companies in power, steel and railway sector.

The government has already cleared a two-year moratorium for deferred spectrum payments for the mobile operators.

The letter by Ficci also urges government to take immediate steps for addressing the concerns of the sector. The letter said telecom sector is also supplementing the growth of e-commerce in India and supporting growth of government initiatives like Digital India.

"At a time when the world is witnessing the advent of new possibilities and business opportunities from emerging technologies such as 5G, AI, IoT etc which will redefine the way business and economies will work in coming decades, it is important that India retains its leadership position in telecom space," Ficci said.