Telecom Operators Meet Government Panel to Discuss Sector’s Health

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Four telecom companies — Reliance Jio, Reliance Communications, Aircel and Tata Teleservices — on Monday met the inter-ministerial group (IMG) formed to look into the dwindling fortunes of the sector.

Industrialist Mukesh Ambani-led Reliance Jio, the new entrant in the industry, said the telecom firms not investing enough in new technologies and leveraging their balance sheet need to blame themselves for their financial difficulties.

A Jio official said: “Operators (excluding Jio) need to invest Rs 125,000 crore, pay back debt and they need to invest in technology, as growth is happening in data.”

The official said the other companies can do this even by selling their stakes.

He further added that the few policy interventions that are required for the industry should come as reduction in Goods and Services Tax rates, licence fee and Universal Service Obligation Fund levies.

He elaborated that reduction in GST rates, USOF and licence fees will help the telecom industry generate an additional Rs 20,000-25,000 crore earnings before interest, tax, depreciation and amortisation (Ebitda).

The telecom sector’s debt is estimated to be over Rs 4 lakh crore.

Telecom minister likely to meet promoters of service providers on June 22-23

An official of Anil Ambani-led Reliance Communications (RCOM) said: “The state of the sector is known to all. Our demands are same as our presentation earlier. We want reduction of licence fees and deferred spectrum payments.”

RCOM has already proposed licence fees reduction to 5 per cent from the existing 8 per cent; reduction of spectrum usage charge to a uniform rate of 1 per cent; and deferred payment of spectrum charges.
Aircel also echoed similar demands.

The task of the IMG is to examine systemic issues affecting viability and repayment capacity in telecom sector and furnish recommendations for resolution of stressed assets at the earliest.

It will submit its recommendations within three months.

This was the first meeting among the series of meetings planned this week. The panel will be meeting BSNL and MTNL on Tuesday followed by Airtel and Vodafone India on Friday.

It will also be meeting top public sector bank officials as well.