Responding back to claims of the government looking to set up a financial bailout package for the Indian telecom industry, Reliance Jio has lashed out at telecom body Cellular Operators' Association of India (COAI) for “creating alarmist propaganda for the doom of the industry in India.”
The Reliance-owned telco has shared its concerns in a letter, directed towards Rajan Matthews, Director General, COAI on Wednesday.
Jio, through this letter also alleged that “COAI, through its behaviour, has proved they are not an industry body, but just a mouthpiece of two service providers (namely Airtel and Vodafone Idea).”
COAI, through its letter to the Indian government, is claimed to have communicated that rising debt on telcos in the country will lead to massive repercussions for the economy.
But Jio responded to those claims saying, “it strongly takes exception to statements like ‘investments and Government revenue will suffer, Quality of service (QoS) will deteriorate, monopolies will be created and ambitious Government programs will suffer’.”
According to Jio, as mentioned in the letter (attached below), “failure of two operators, even in the unlikely event of it actually happening, will not have impact on the sector dynamics with the existence of vibrant competition.”
The telco also accused “Airtel and Vodafone Idea of choosing to offer below-cost tariffs to users, even when they highlight so-called financial stress, especially when there is no pressure on them to continue with these data prices.”
This outburst from Reliance Jio comes after industry body COAI on Tuesday urged the newly constituted panel of secretaries to prescribe immediate relief measures to address the AGR issue first, given the "urgency of the situation".
The immediate focus should be on suggesting a relief package to address the AGR issue since the stipulated payment timeline is a mere three months, Mathews said.
"This is absolutely critical and needs to be addressed first...We would request that the suggestions be worked out within 60 days," Mathews said adding that the other aspect on the long-term viability of the sector and financial stress could then deliberated on.
With the telecom sector staring at a massive payout following a Supreme Court order, the government has constituted a Committee of Secretaries to work out a financial bailout package that may include lowering of spectrum charges as well as ending the era of free mobile phone calls and dirt cheap data.
The Committee of Secretaries, headed by Cabinet Secretary Rajiv Gauba, has been asked to examine "all aspects" of "financial stress" faced by service providers such as Bharti Airtel and Vodafone-Idea Ltd and suggest measures to mitigate them, sources in the Department of Telecommunications (DoT) said.
Since then, Vodafone Idea publicly refuted the reports which alleged the telco is looking for a bailout.
“There has been reportage in some media alleging that Vodafone Idea has approached its lenders for debt recast. We categorically deny and dismiss this as baseless and factually incorrect. We have not made any request for debt recast to any lender or asked for reworking of payment terms. We continue to pay all our debts as and when these fall due.”Vodafone Idea statement
It will be interesting to hear Airtel’s side of the story, which is likely to be shared in the coming days.
(With PTI inputs)
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