There is also pressure of doubling up of both upfront spectrum payments and continued revenue share obligations which cumulatively amount to approximately 14-15 per cent AGR. And this, along with GST of 18 per cent, means that over 30 per cent of the top line revenues of the TSPs goes to the Government by way of taxes and levies, said COAI.
The letter further said both domestic and international banks are unwilling to provide any form of liquidity to the TSPs given the poor financial prospects of the operators. This has created shortfalls in working capital funds and resulted in severe debt servicing.
Still in spite of such a situation, TSPs, even after the tariffs hikes, continue to provide lowest tariffs for data at Rs 11 for 1 GB. This is much below the rates paid by consumers 4 years ago at Rs 225 per GB and Rs 330 in 2010, the COAI noted.
Voice rates have also been low with ARPU at Rs 80 from Rs 118 in 2017 and Rs 141 in 2010, it added.
The COAI's letter also said the hikes will improve financial health of the telcos, their borrowing capacity, result in more dues to the government with higher AGR and their network expansion and upgrading, which will lead to better quality of services.
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.