Government will take 'corrective steps' on telecom stress: Sinha

Paterniano Del Favero
Giugno 24, 2017

After the meeting, Sinha told mediapersons that an Inter-Ministerial Group (IMG) has been formed to examine systematic issues affecting the viability and the repayment capacity in the telecom sector.

"The telecom service providers discussed the financial stress they are facing".

Reliance Jio had last week ascribed the financial stress in the sector to existing operators like Airtel and Idea running businesses on debt and investing heavily in unrelated sectors.

The Minister said this in a meeting with promoters of telecom service providers where representatives of Department of Financial Services and State Bank of India were also present. They have also sought an extension on deferred spectrum liabilities, meaning that the amount they bid for radiowaves should be payable over a longer period. The meeting was chaired by Telecom Minister Manoj Sinha and representatives from most of the leading telecom companies attended the meeting.

Union minister of communications Manoj Sinha met top executives of telecom firms, including Bharti Enterprises founder and chairman Sunil Mittal, Reliance Group chairman Anil Ambani, Tata Sons director Ishaat Hussain, Reliance Jio board member Mahendra Nahata, and Idea Cellular managing director Himanshu Kapania.

"The report of the inter-ministerial group (IMG) will come soon..." Jio alleged that the incumbent operators had been reluctant in infusing equity and hence the financial stress is their own creation.

The incumbent operators and Jio differed sharply over the contentious issue of call connect charges, with the newcomer favouring removal of these rates and incumbents demanding an increase in the current rate of 14 paise/minute.

Carriers in India's telecoms sector have been hurt by a price war eating into revenues and profit. An official present at the meeting said that incumbent operators also pointed to the asymmetric traffic to justify their demand for an increase in the Interconnection Usage Charges.

All operators agreed that licence fee and spectrum usage charges should be lowered as part of rationalisation to reflect only administrative cost since spectrum is now acquired through auctions.

Citing Rs4.6 trillion cumulative debt of the sector, the incumbents have made a case for urgent relief measures like extension on payment of deferred spectrum liability and cut in levies.

Initially, the company chiefs met Sinha separately.

This is published unedited from the PTI feed.

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