1. Reliance Jio impact: Even as ailing telcos struggle under Rs 4.6 lakh cr debt, Minister Manoj Sinha meets Trai chief, eyes remedies

Reliance Jio impact: Even as ailing telcos struggle under Rs 4.6 lakh cr debt, Minister Manoj Sinha meets Trai chief, eyes remedies

In a day of meetings, Telecom Minister Manoj Sinha discussed policy issues with TRAI Chairman R S Sharma, even as the inter-ministerial group began brainstorming separately to look for remedies at the whopping Rs 4.6 lakh crore debt that is ailing telcos.

By: | New Delhi | Published: June 23, 2017 10:54 PM
Reliance Jio, Reliance Jio impact, Telecom Minister Manoj Sinha, Telecom Minister, TRAI, IMG, inter-ministerial group, TRAI Chairman, R S Sharma, telecom debt The telecom industry is reeling under Rs 4.6 lakh crore debt and even large operators are complaining that competition, intensified by agressive newcomer Reliance Jio, has put a severe pressure on their revenues, profitability and other key financial metrics. (Reuters)

In a day of meetings, Telecom Minister Manoj Sinha discussed policy issues with TRAI Chairman R S Sharma, even as the inter-ministerial group began brainstorming separately to look for remedies at the whopping Rs 4.6 lakh crore debt that is ailing telcos. Sinha and Sharma held discussions in the presence of new Telecom Secretary Aruna Sundararajan and Telecom Commission Member (Finance), and Universal Services Obligation Fund Administrator. According to sources, the high-level meeting was held to discuss regulatory and policy issues in the sector and expedite the Bharat Net project. A separate meeting was also held among the members of the inter-ministerial group (IMG) whcih has been constituted to look into the telecom industry’s financial woes. The IMG, last week, held extensive dialogue with all telecom companies as well as large banks to discuss the industry’s financial stress and look for measures that can be taken to address the situation.

The telecom industry is reeling under Rs 4.6 lakh crore debt and even large operators are complaining that competition, intensified by agressive newcomer Reliance Jio, has put a severe pressure on their revenues, profitability and other key financial metrics. Bharti Airtel, Vodafone and Idea Cellular as well as other telcos are making an aggressive pitch for reduction in levies and taxes, and are also seeking an extension in the deferred payment liability for spectrum. “The IMG members met today and dicussed the demands placed by the industry…their demands were reviewed and another meeting may be held in the coming week,” a person familar with the matter told PTI. On Thursday, the minister had assured industry bigwigs Sunil Mittal and Anil Ambani as well as other telecom players that “corrective steps” will be taken to ensure orderly growth of the beleaguered sector. After a two-hour meeting with telecom honchos yesterday, the Minister had said that the IMG will give its report “soon”.

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Apart from Bharti Airtel Chairman Mittal and Reliance Communications Chairman Anil Ambani, Thursday’s meeting was attended by Idea Cellular Managing Director Himanshu Kapania, Tata Sons Director Ishaat Hussain and Reliance Jio Infocomm Board Member Mahendra Nahata. Jio has been ascribing the financial stress in the telecom sector to existing operators like Airtel and Idea running businesses on debt and investing heavily in unrelated sectors. Jio has alleged that the incumbent operators had been reluctant in infusing equity and hence the financial stress is their own creation. The incumbent operators have outrightly rejected these charges and, in turn, accused Jio of predatory pricing. They have also demanded that operators should be paid more for calls terminating on their networks.

The large operators have also spoken in one voice on reduction of levies like licence fee, spectrum usage charges and GST. They sought an extension on deferred spectrum liabilities – meaning that the amount they bid for radiowaves should be payable over a longer period. Telecom Regulatory Authority of India (TRAI) too had met the telecom companies last week, where Idea Cellular suggested imposition of a minimum floor price for voice and data services.

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