Reliance Jio, COAI lock horns over ‘telecom crisis’

Telco against any bailout package for rivals

Reliance Jio Infocomm Limited (RJIL), in a strongly worded letter to Cellular Operators Association of India (COAI), has accused the body of exploiting the legitimate payout obligations in a bid to create an alarmist propaganda for the doom of the telecom sector.

The letter came after the COAI on Tuesday wrote a letter to Telecom Minister Ravi Shankar Prasad seeking relief for the telecom companies due to unprecedented crisis in the telecom industry.

COAI’s letter, seeking bailout for older incumbents Bharti Airtel and Vodafone Idea, said “investments and government revenue will suffer, quality of services will deteriorate, monopolies will be created and ambitious government programmes will suffer.”

RJIL, in the letter addressed to Rajan S. Mathews, director general, COAI, said, “RJIL completely disagrees with the intent, tone, contents and connotations of the COAI letter. This letter does not represent the industry view by any stretch of imagination.” The Hindu has a copy of the letter.

“The failure of the two operators, even in the unlikely event of it actually happening, will not have an impact on the sector dynamics with existence of vibrant competition, including the presence of the PSUs and there is no restriction on entry by new operators,” said RJIL, adding that the financial difficulties of these operators were an effect of their own commercial decisions and the government should not be obliged to bail them out for their own commercial failure and financial mismanagement.

According to RJIL,“There will be no impact on the digitisation and government programmes, as these operators, anyway, were not investing sufficiently in the sector and ‘have been shedding crocodile tears’ by claiming a financial stress for a long time now and they not shown any inclination to modernise the networks, as evident in TRAI data on its IUC.”

RJIL’s letter said that its promoters alone have made an euity investment of ₹1.75 lakh crore in the sector while equity investments by Bharti Airtel and Vodafone-Idea have been inadequate keeping in view the network requirements.

“Therefore, the failure of these operators cannot be blamed on the government,” RJIL added.

On payment of government dues after the Supreme Court’s order, RJIL said, “These operators have capacity and enough monetisation possibilities to comfortably pay government dues.”

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