Waiver provision removed in Telecom Bill, could hurt Vi recovery: Experts

The original draft of the Bill contained a framework to waive the license fees for financially troubled companies. Had these provisions made it to the final bill, things would have been easier for VI

The Telecommunications Bill, 2023 has bad news for the financially struggling telecom operator Vodafone Idea (VI) as the new regulation removed the provisions allowing waivers of license fees, penalties, and charges. The change will make it tough for the beleaguered telco to raise additional funds, The Economic Times (ET) reported citing lawyers and analysts.

The original draft of the Bill contained a framework to waive the license fees for financially troubled companies like Vodafone Idea. Had these provisions made it to the final bill, things would have been easier for VI.

“The proposed powers to waive off or defer payment of fees, penalty and other charges have been removed from the final Bill. This would have a negative impact and has likely been removed due to that reason,” a partner at Karanjawal & Co, Manmeet Kaur was quoted as saying by the ET.  

“This reduces the hope of entities like VI to have any concession about payment of dues,” Kaur added.

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The ET report cited a government official as saying that the provision was removed from the final Bill as this could have given discretionary powers to the government, which could have led to problems.

What did the original draft say about waivers?

The original draft said that such charges could be waived off in certain situations in the interest of consumers, ensuring competition, reliability, and continued supply of telecom services, or availability of telecom networks or telecom infrastructure in India.

A partner at Economic Laws Practice, Abhay Chattopadhyay told The Economic Times (ET) that the provision in the draft had contemplated a framework that would have allowed the government to help struggling telcos.

As things stand, there are only four main players in the telecom sector, namely, Jio, Bharti Airtel, Vodafone Idea, and BSNL. Among these, Jio and Airtel hold a lion’s share of the market. With this as a background, experts have said that the survival of VI is essential to avoid a situation of duopoly in the telecom industry.