- The new Supreme Court order on AGR puts immense pressure on Bharti Airtel and Vodafone Idea
- The two companies owe Rs 80,000 crore to the government in dues
- Reliance Jio comparatively owes very less dues to the DoT
There has been a widespread controversy going on in the telecom industry over the new Supreme Court order, which has changed the definition of the Adjusted Gross Revenue (AGR). The new order from the Apex Court has put a massive pressure under the two of the major telecom companies in India, Bharti Airtel and Vodafone Idea who now have to pay over Rs 80,000 crore in dues in only three months. The Cellular Operators Association of India (COAI), which represents the telecom operators of India has written a letter to the government asking for relief from the centre over the issue and saying that the telecom industry could collapse if relief is not provided to these telecom operators. However, the other major telecom operator in the country, Reliance Jio is not agreed on this matter with the COAI. Hence to present its own views independently, Reliance Jio has written a separate letter to the Department of Telecommunications (DoT).
Reliance Jio Asks Government to Dismiss COAI Plea
In its letter to RS Prasad, the telecom minister, Reliance Jio has noted that the COAI has not left any choice to the telecom operator, other than to reach out independently to the DoT, as the association went on with the previous letter without taking Reliance Jio’s views on the matter and the opinions that the letter presented. Further, Reliance Jio said that the COAI has used a threatening tone towards the government by referring to possible job losses, QoS loss and loss of investments in the sector. It also said that these two telecom operators, whose views constitute most of the views represented in the letter, have implied that if relief is not provided by the government on the matter of the AGR, then they will stop operations. Reliance Jio has asked the government to “strongly rebuff such suggestions and insinuations”.
COAI Declared as Mouthpiece of Two Telcos by Jio
Reliance Jio has detailed that the two telecom operators in question, have made profits in the past and hold many ventures across the country which are generating revenue for them are in full financial capacity to pay their dues which have been asked by the Supreme Court. It further iterated that these telecom operators have got three months’ time to pay their dues. In its very strongly worded letter, the Mukesh Ambani led telecom operator has also gone ahead to request the government to dismiss identifying COAI as an industry body which represents telecom operators as it is a “mouthpiece” of two telecom operators only. It noted that with these two companies, there does not seem to be any constraint in making the funds available to pay off their dues, but the issue seems to be only with the intent, which the government can see clearly in COAI’s last letter.
Reliance Jio Claims No Effect on Industry If Telcos Fail to Pay Dues
The letter by Reliance Jio adds more to the issue and states that the two telecom operators, in the unlikely events that they are not able to pay their dues, won’t affect the industry dynamics, as ample competition exists in the sector, with the presence of PSUs as well. Also, it has said that such a situation won’t affect the government’s digitisation plans as these telecom operators, did not anyways invest enough in the sector as was evident from the consultation paper on the matter of IUC. Whereas, Reliance Jio has invested Rs 1.75 lakh crore in the sector as compared to the inadequate investments by the other two telecom operators. The letter goes on to state that the previous note by COAI is just an attempt to “extract” relief from the government by the two telecom operators, in a scenario where all the other legal recourses have been exhausted by these companies.
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.