Airtel Chairman Hopeful About Relief from Government and Trai to Ease Financial Pressure on Telco

Bharti Airtel chairman, Sunil Bharti Mittal met with commerce and industry minister Piyush Goyal to discuss relief for the telecom companies

Highlights
  • One relief comes from Trai in form of deferment of zero IUC regime
  • Another relief could be the setting of floor pricing
  • Bharti Airtel is also going to raise funds in the coming days

The Bharti Airtel Chairman, Sunil Bharti Mittal led telecom operator met with commerce and industry minister, Piyush Goyal to discuss the future pathway of the telecom industry and the relief that the telecom companies might be getting from the government in the coming days. As per a new ET report on the matter, Sunil Bharti Mittal said that Bharti Airtel would be fine if the telecom regulator brings floor pricing in the industry for voice tariffs as well as data. The chairman also remarked that he has “legal hope” for relief on the Rs 35,500 crore dues that the telecom operator needs to pay in over a month. It is worth noting that the AGR dues which have come on the shoulders of the telecom operator amount to Rs 35,500 crore on account of penalties, interests, spectrum usage charges and license fees.

airtel-chairman-relief-telcos

Sunil Bharti Mittal Optimistic About Relief

Sunil Bharti Mittal said, “Trai finally floated a consultation paper on tariffs, that was our request, and we are glad that they have heeded to the request of the industry.” His remarks came only a day later after Trai floated the consultation paper on the matter of floor pricing for the industry. Mittal was also questioned as to whether or not it would be hard to regulate voice tariffs, to which he replied that “They need to bring some sanity and orderliness in the telecom industry, so we are happy with whatever they decide.” The private telecom operators in India including Reliance Jio, Vodafone Idea and Bharti Airtel want the floor pricing for the data tariffs, but do not want voice to be regulated in anyway.

The Telecom Regulatory Authority of India (Trai) in turn has its own doubts about regulating the tariffs for data and not for voice. As per Trai if the data tariff is regulated in an environment where 4G is the standard, and a chunk of voice calls are being made over the 4G network through VoLTE, then it would not make sense. The demand to regulate data tariff and to keep voice under forbearance would create a disparity between the telecom operators offering the same services.

Trai Objects to Regulating Only Data

Currently, in the Indian telecom industry, Reliance Jio is the only operator offering 4G only network, and all of the voice calls on the Reliance Jio network are routed through the VoLTE route. Bharti Mittal also said that he has legal hope on the AGR issue and the company is still waiting on the reply to the review petition that it has filed in the Supreme Court.

The dues which exceed in total of Rs 90,000 crore for both Vodafone Idea and Bharti Airtel combined have put excessive financial pressure on these two telecom operators. While Vodafone Idea has little to no plan to provision for these dues, Bharti Airtel is on the way to raise $3 billion via equity and debt to pay off its dues. However, even with this, the telecom operator has put in the word that its ability to go on as “going concern” might be in jeopardy if its fails to raise funds at the right time.

Trai Steps to Help Industry

According to the analysts, the moves that Trai is making right now, are in favour of the telecom industry. The first favourable move in the recent times has been that of the deferment of the zero IUC regime which will allow the telcos to charge 6 paise per minute as IUC and will ensure better operating revenue.

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Arpit spends his day closely following the telecom and tech industry. A music connoisseur and a night owl, he also takes a deep interest in the Indian technology start-up scene and spends rest of his time spilling poetry and stories on paper.

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