Reliance Jio Says Failure To Invest In New Technology Hurt Other Operators
An inter-ministerial panel met three telecom operators to discuss the financial health of the sector.
Reliance Jio Infocomm Ltd. told a government panel that rival telecom operators only had themselves to blame for their financial stress, an official who was present at the meeting told BloombergQuint requesting anonymity.
The Mukesh Ambani-promoted company told the inter-ministerial panel that its rivals’ debt has gone up because they didn’t invest in new technology, the official quoted above said. Older telecom operators have blamed Reliance Jio of disruptive pricing which forced them to cut tariffs to protect their consumer base over the past few months.
The panel also met representatives from Reliance Communications Ltd. and Aircel Ltd. on Monday. Reliance Communications, which has seen a series of downgrades in the recent past, has already sought help from the government and regulators to step in and improve the health of the telecom industry. The estimated debt of the entire industry now stands at over Rs 7.5 lakh crore, according the telecom operator's chairman Anil Ambani.
Demand For Easier Payment Schedule
Both Reliance Communications and Aircel want to stagger spectrum-related payments to the government over the 20 years they would use the spectrum, instead of 10 years, as stipulated in the contract inked with the government. The two telecom operators, which are going to merge operations, also pushed for scrapping spectrum usage and inter-connection charges, said officials with direct knowledge of the matter requesting anonymity.
Reliance Jio, however, opposed any relaxation on spectrum payments, said one of the officials quoted above.
There was general consensus among the three telecom operators who met the government officials on Monday that the contribution to the Universal Service Obligation Fund (USoF) should be relaxed. The fund is used to fund higher capital cost of providing services in rural and remote areas.
The inter-ministerial group will meet officials of state-run telecom operators Bharat Sanchar Nigam Ltd. and Mahanagar Telephone Nigam Ltd. on Tuesday. Bank officials will meet the panel on Wednesday, while the country's top three telecom operators – Bharti Airtel Ltd., Idea Cellular Ltd and Vodafone India Ltd. – will make their presentations on Thursday.