Mukesh Ambani’s Jio slams COAI; says association blackmailing govt citing imaginary crisis in telecom sector

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October 30, 2019 6:08 PM

Jio accused COAI of "serious breach of trust" and having a "prejudiced mindset completely laced with one-sided thought process".

Jio accused COAI of “serious breach of trust” and having a “prejudiced mindset completely laced with one-sided thought process”.

Billionaire Mukesh Ambani’s Reliance Jio on Wednesday slammed telecom industry body COAI for its “threatening and blackmailing” tone in its communication to the government on non-existent crisis in the sector following the Supreme Court ruling on payment of statutory dues. Taking strong exception to the Cellular Operators’ Association of India (COAI) dispatching a late night communication to the government without waiting for its comments, Jio in a strongly-worded letter to the association’s Director General Rajan Mathews said an unlikely event of failure of two operators will not have any impact on competition and the Centre’s Digital India agenda.

Jio accused COAI of “serious breach of trust” and having a “prejudiced mindset completely laced with one-sided thought process”. “It seems there were extraneous consideration to sent this letter, only on behest of other two members. By such unwarranted behaviour COAI has just proved that they are not an industry organisation but just a mouthpiece of two service providers,” Jio said in its letter on Wednesday.

Jio, the newest and the most aggressive player in the telecom clan, said that it disagrees with intent, tone and contents of COAI’s letter, which it argued does not represent industry views by any stretch of imagination. COAI in its letter to the government has said that in absence of an immediate relief by the Centre, two of the three private mobile operators — Airtel and Vodafone Idea which provide services to 63 per cent of the current subscriber base — will face “unprecedented crisis”.

Attacking COAI’s position, Jio said: “We are taking a strong umbrage at COAI exploiting the legitimate pay out obligations to create an alarmist propaganda for the doom of the telecom sector in the country.” Jio said it disagrees with the “threatening and blackmailing tone” of COAI and accused the older operators of not investing sufficiently in the sector and “shedding crocodile tears” by claiming financial stress.

It also said the operators have not shown any inclination to modernise networks, while Jio promoters have made an equity investment of Rs 1.75 lakh crore. “Therefore the failure of these operators cannot be blamed on the Government,” Jio argued. The financial difficulties of the said operators is their own doing and effect of their own commercial decisions, Jio said, adding the “government should not be obliged to bail them out of their own commercial failure and financial mismanagement”.

Jio said that COAI’s observations were not only factually incorrect and unwarranted but tantamount to contempt of court. “COAI’s intent of using this as an opportunity to seek non enforcement of the SC judgement and asking for relief is strongly objected by Reliance Jio…These operators have the capacity and enough monetisation possibility to comfortably pay government dues,” Jio said.

Jio also said that COAI as an organisation “supposedly representing all operators” should stop blaming the apex court ruling and instead ask members to respect the judgement and “stop forum shopping for relief”. Seeking the government’s immediate intervention to avert an unprecedented crisis, COAI also mentioned that one of its members has a different opinion on the matter and will present its comments separately.

COAI warned that impact of the crisis could be potentially catastrophic for the country, leading to curtailing of investment and deterioration of services and job losses, as well as shattering of investor confidence. The top court had last week upheld the government’s position on including revenue from non-telecommunication businesses in calculating the annual AGR of telecom companies, a share of which is paid as licence and spectrum fee to the exchequer.

While Bharti Airtel faces a liability of around Rs 42,000 crore after including licence fees and spectrum usage charges, Vodafone-Idea may have to pay about Rs 40,000 crore. Jio may have to pay around Rs 14 crore.

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