Government of India is forcing telecom companies to set a floor price which may recover revenues in the industry and boost up the confidence of investors.
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Government has been forcing Telecom Regulatory Authority of India (TRAI) to set a floor pricing as Vodafone Idea is struggling to pay their Adjusted Gross Revenue (AGR) dues by 17 March, 2020.
Vodafone Idea has been trading at a market cap of Rs 11,149 crore which is far more less than their dues which is worth Rs 57,000 crores. Recently, Vodafone Idea paid only Rs 3,500 Crores from their assessment of AGR dues which is worth Rs 23,000 Crores.
So, the government officials approached The Telecom Regulatory Authority of India (TRAI) to implement the same and set a floor tariffs which would restore the long term viability of the telecom sector.
Bharti Airtel stated that the ARPU must raise till Rs 200 and even Rs 300 for which a floor price will be required.
Government is trying to find a solution which would ensure that 30 Crore network users will have their network connections on their phone. Supreme court has not rolled out any relief on the AGR dues to telcos. However, attention is being shifted to concessions on non-AGR issues.
Government is working on the relief package for these telcos which will help them to sustain in the market. Beside these another measures like deferment of license fee, spectrum usage charge have also been planned by government officials.