In a letter to the telecom minister Ravi Shankar Prasad, billionaire Mukesh Ambani-owned Reliance Jio Thursday said that the government should throw away the relaxation demand of older rivals— Bharti Airtel and Vodafone Idea led by a Delhi-based group.
The Cellular Operators Association of India (COAI) Tuesday sought stimulus in the wake of the top court’s ruling mandating telecom carriers to pay Rs 1.3 lakh crore including interest on account of annual gross revenue (AGR), impacting the two incumbents the most.
“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,” Jio in a letter dated October 31 said.
Mumbai-based company further cautioned the Centre that a similar demand of reprieve may also arise from different 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 letter read.
Citing media reports, Jio further said that, “these operators have not provisioned possible liabilities, which is binding on them as per the Indian Accounting Standards and the Companies Act,” and added that telcos willfully violated disclosure norms continuously since 2011.
Following the apex court order, settling a decade-and-a-half long dispute between the service providers and the Department of Telecommunications (DoT), the telecom body has sought sops for the industry, already reeling under a cumulative debt of Rs 8 lakh crore.
Group’s director-general Rajan S Mathews in a letter to Prasad said that “such an adverse outcome (SC verdict) will trigger a chain of events which will result in a disruption to the entire telecom business.”
Seeking “urgent intervention” from the government to avert an unprecedented impact on the financial health of our member companies, the group added that the financial crisis might impact the companies’ appetite to invest, putting the ambitious government-run programs at risk.
Jio, hitting at the telco body founded in 1995, said that it has used “threatening and blackmailing tone” with the government by referring to possible job loss, and loss of investments in the sector.
Sunil Mittal-driven Bharti Airtel alone faces nearly Rs 41,507 crore, with Rs 22,000 crore in license fees, penalty, and interest alone, while Vodafone Idea has been asked to shell out close to Rs 29,000 crore against license fee, penalty, and interest within three months.
However, Vodafone Idea in a statement to the Bombay Stock Exchange last Friday said that it would engage with the government to consider granting relief, including a waiver of interest and penalties.