“Ind-Ra believes that the reforms related to the four-year moratorium / postponement for AGR fees and spectrum-related liabilities (other than those auctioned in 2021) are likely to provide a medium-term liquidity buffer for operators of telecommunications, without having any impact on the actual liability to be paid by them, âhe said.
Vodafone Idea (Vi) has accepted the four-year moratorium on spectrum payments, which could offer cash relief of up to Rs 60,000 crore, analysts said. He has time until October 29 to decide whether to opt for the AGR moratorium, which runs from FY22-23 to FY25-26, on AGR payments as well. He has 90 days to exercise a one-time option to convert interest accrued due to deferred payments into government equity.
Ind-Ra further stated that Union Cabinet telecommunications reforms will reduce and ease the regulatory burden on telecommunications operators in the medium to long term.
The Union Cabinet approved a set of nine structural reforms and five procedural reforms in addition to other relief measures for telecommunications operators and the sector on September 15, 2021. These reforms entered into force on October 1, 2021 .
These reforms include removing non-telecom revenues from the definition of Adjusted Gross Income (AGR), streamlining bank guarantee requirements, reducing interest rates and allowing 100% foreign direct investment (FDI) in the sector automatically.
“The agency believes the procedural reforms will also streamline procedural processes, provide more visibility in terms of auction timing and help the industry in the long run,” Ind-Ra said.
He noted that the industry is showing signs of continuous improvement and that the average revenue per user (ARPU) could increase even without an increase in tariffs. the overall subscriber base over the past year indicates that the industry’s average revenue per user could increase even without tariff increases, âhe added.
The rating agency said the industry-wide wireless subscriber base, which grew by 6 million in July 2021 on a monthly basis, fell slightly by 0.1 million subscribers in August. 2021 to reach 1,187 million subscribers.
Ind-Ra reported that the number of broadband subscribers increased to 66.5% of the global wireless subscriber base in August 2021, from 66.1% in July 2021. As of August 2021, the number of Broadband subscribers increased by 4.6 million and broadband penetration as a percentage of the overall subscriber base continued to grow.