It is worth examining if the government should only focus on squeezing the telecom sector, or it should also consider their ability to invest, which can have a multiplier effect in today’s connected world. Analyse (200 Words)
Refer - Business Standard
Enrich the answer from other sources, if the question demands.
IAS Parliament 5 years
KEY POINTS
· The telecom sector has been in a state of chaos, raising some serious questions for the government.
· Fresh trouble arose after the Supreme Court agreed with the Department of Telecommunications’ definition of adjusted gross revenue and directed telcos to pay dues with interest, amounting to Rs 1.33 trillion, within three months.
· Incumbent companies, saddled with debt, have expressed their inability to pay and are looking for waivers. The total debt of telcos is at Rs 4 trillion.
· The Cellular Operators Association of India (COAI) has argued that the decision will lead to a monopoly in the sector and will affect the digitisation programme of the government.
· Meanwhile, stock prices of legacy players have suffered, their credit rating has been downgraded, and at least one of them is reported to be negotiating better terms of repayment with lenders.
· The government, on its part, has done well to set up a committee of secretaries to suggest measures to ease financial stress in the sector.
· The accumulation has not happened entirely because of the way businesses are managed. This also resulted in significant consolidation in the sector, as a number of telcos exited the business or shut it down.
· A holistic review of past decisions will allow the government to make policy corrections, which will help ease stress in the sector in a sustainable manner.
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Dues arising from the apex court ruling could reduce the market to only two private-sector operators. This would clearly lead to concentration of market power and have a bearing on the quality of services and investment in the sector.
· The Indian telecom sector is at a critical juncture and how the government handles the situation will not only have a bearing on the sector but will also influence the investment climate in general.
Manojkumar B 5 years
Kindly review
IAS Parliament 5 years
Good answer. Keep Writing.
DHARU 5 years
Kindly review!!
IAS Parliament 5 years
Good attempt. Keep Writing.
Shivangi 5 years
Please review. Thank you.
IAS Parliament 5 years
Good attempt. Keep Writing.
Pocomaster 5 years
Review Asap! Thank You..
IAS Parliament 5 years
Good answer. Keep Writing.
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