Telecom Stocks Rally up to 19% as Government Plans Waiver on Spectrum Usage Charges
Telecom Stocks: In a major development that could reshape the future of India’s telecom sector, telecom stocks surged significantly on Wednesday, with some soaring nearly 19%, after reports suggested that the government may soon waive spectrum usage charges (SUC) for airwaves bought before September 2021. This strategic move is expected to offer relief worth thousands of crores to struggling telecom operators, fueling investor optimism and lifting sector sentiments across the board.
Government’s Relief Plan: A Game-Changer for Telecom Operators
The Indian government is reportedly in the final stages of approving a proposal to waive SUC on spectrum acquired before September 2021. While the SUC had already been abolished for spectrum purchased after that date (starting June 2022), older spectrum still attracted SUC, typically amounting to 3–4% of a telecom operator’s adjusted gross revenue (AGR).
If approved, this waiver would close a critical loophole and significantly reduce the financial burden on telecom players. This move comes as part of a broader plan to support the industry as it transitions to 5G and modernizes infrastructure.
The Department of Telecommunications (DoT), along with other key ministries, has reportedly reviewed the proposal, and a formal announcement is expected soon.
What Is SUC and Why Is It Important?
Spectrum usage charges are payments made by telecom companies to the government for using the radio frequency spectrum. These charges are over and above the license fee (8% of AGR), including a 5% allocation toward the Universal Service Obligation Fund (USOF), which supports rural telecom infrastructure.
Waiving SUC for older spectrum would bring parity in the regulatory framework and help operators like Vodafone Idea, Bharti Airtel, and Reliance Jio invest more aggressively in 5G expansion.
Stock Market Reaction: Telecom Stocks in Focus
1. Mahanagar Telephone Nigam Limited (MTNL)
- Stock Surge: +19.5%
- Market Price: ₹58
- Market Cap: ₹3,352 crore
- Wireless Subscriber Share: 0.08% (April 2025)
MTNL led the rally with a staggering 19.5% gain as investors bet on potential fiscal relief and possible operational revival through government support.
2. Vodafone Idea Limited (Vi)
- Stock Surge: +6%
- Market Price: ₹7.27
- Market Cap: ₹77,248.6 crore
- Wireless Subscriber Share: 17.66% (April 2025)
One of the biggest potential beneficiaries, Vodafone Idea stands to gain around ₹8,000 crore from this relief. The telco is burdened with a debt exceeding ₹2 lakh crore, and its AGR dues amount to ₹83,400 crore, payable annually starting FY26.
3. Bharti Airtel Limited
- Stock Surge: +2%
- Market Price: ₹1,970
- Market Cap: ₹11.2 lakh crore
- Wireless Subscriber Share: 33.65% (April 2025)
Airtel also saw investor interest, albeit to a lesser extent, given its relatively stable balance sheet. Still, the SUC relief boosts its cash flows and supports 5G investment.
4. Reliance Industries Limited (Reliance Jio)
- Stock Surge: +1.5%
- Market Price: ₹1,472
- Market Cap: ₹19.8 lakh crore
- Wireless Subscriber Share: 40.76% (April 2025)
Reliance Jio, India’s market leader, welcomed the move as it adds further fuel to its aggressive 5G rollout plans.
Financial Snapshot of Key Players
| Company | Market Cap (₹ Cr) | Stock Price (₹) | % Gain (Today) | Wireless Market Share (Apr 2025) |
|---|---|---|---|---|
| MTNL | 3,352 | 58 | +19.5% | 0.08% |
| Vodafone Idea | 77,248.6 | 7.27 | +6.0% | 17.66% |
| Bharti Airtel | 11,20,000 | 1,970 | +2.0% | 33.65% |
| Reliance Industries (Jio) | 19,80,000 | 1,472 | +1.5% | 40.76% |
What Does This Mean for the Sector?
The anticipated SUC waiver marks a critical turning point. It improves the operational viability of financially distressed firms like Vodafone Idea and provides a level playing field across spectrum holders. With more liquidity at their disposal, telecom operators can accelerate their 5G rollouts, invest in rural expansion, and improve overall quality of service.
From a policy perspective, this is seen as a continuation of the government’s effort to revitalize the telecom sector, which has long battled intense competition, high debt, and regulatory pressure.
Frequently Asked Questions (FAQs)
Q1: What is the Spectrum Usage Charge (SUC)?
A: SUC is a fee paid by telecom operators to the government for using radio frequency spectrum, typically 3-4% of their adjusted gross revenue (AGR).
Q2: Why are telecom stocks rallying today?
A: Stocks jumped after reports suggested the government may waive SUC for spectrum acquired before September 2021, offering relief worth thousands of crores.
Q3: Who benefits most from this waiver?
A: Vodafone Idea stands to gain the most due to its large SUC liabilities and debt burden, with an estimated ₹8,000 crore in relief.
Q4: What was the SUC policy earlier?
A: SUC was scrapped for spectrum bought after September 2021, but older spectrum still attracted the charge—this new move aims to address that gap.
Q5: How does this move impact 5G deployment?
A: It frees up cash for telecom operators, enabling faster investment in 5G infrastructure and rural network expansion.
Q6: What is the Universal Service Obligation Fund (USOF)?
A: It is a fund maintained by the government, where 5% of the license fee paid by telcos is used to improve telecom connectivity in rural and remote areas.
Conclusion
The government’s expected SUC waiver is not just a financial breather for telecom companies—it’s a signal of long-term policy support aimed at making India’s telecom sector more competitive and sustainable. Investors, operators, and consumers alike stand to benefit from this move as it paves the way for improved connectivity, faster 5G deployment, and healthier competition.
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