October 31, 2019

Reliance Jio Writes To Union Telecom Minister Urging Him To Reject Financial Relief Demand Of Telcos Hit By SC Order

[ By Bobby Anthony ]


Mukesh Ambani-owned Reliance Jio has written a letter to Union Telecom Minister Ravi Shankar Prasad urging him to reject a demand by its rival telecom companies like Bharti Airtel and Vodafone Idea which are represented by a Delhi-based lobbying group called the Cellular Operators Association of India (COAI).

The development has come on the heels of COAI which recently sought “a stimulus package” from the central government after the recent Supreme Court order mandated Bharti Airtel and Vodafone Idea to pay Rs 1.3 lakh crore including interest on account of annual gross revenue (AGR).

“We request the government to reject the COAI demand for financial relief on the Supreme Court judgment and their other outstanding liabilities including the spectrum payments and all operators should be mandated to deposit applicable amounts within the three months’ time period,” Reliance Jio stated in a letter dated October 31.

The Reliance Jio letter also cautioned the central government that similar demands of financial relief may arise from different beleaguered sectors. “It will not be out of context to mention that any such package which prima facie appears to mitigate perceived financial strains, if granted, is likely to raise similar demands from other sectors such as aviation,” the Jio letter read.

After the recent Supreme Court order, settling the dispute between Reliance Jio’s rivals Bharti Airtel as well as Vodafone India versus the Department of Telecommunications (DoT), the COAI wrote to the government seeking financial sops for the telecom sector, which is reeling under a cumulative debt of Rs 8 lakh crore.

After the recent Supreme Court verdict, COAI’s director-general Rajan S Mathews wrote to Union Telecom Minister Prasad stating that “Such an adverse outcome (Supreme Court verdict) will trigger a chain of events which will result in a disruption to the entire telecom business”.

The COAI director-general’s letter sought “urgent intervention” from the government to avert an unprecedented impact on the financial health of COAI member companies, adding that the financial crisis might impact COAI represented companies’ appetite to invest, putting ambitious government-run programs at risk.

However, the Reliance Jio letter lashed out at COAI, stating that the lobbying body has used “a threatening and blackmailing tone” with the government by referring to possible job loss as well as loss of investments in the telecom sector.

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