Reliance Jio Says Incumbents, COAI Brought Financial Distress to Smaller Telcos

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Reliance Jio on Monday accused Airtel, Vodafone and Idea Cellular of cartelisation, which has brought real financial distress to smaller telecom operators in the country. The Mukesh Ambani-led also said that the margins in the telecom sector remain healthy, according to media reports.

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Jio, in its presentation to the inter-ministerial group, further claimed that these telcos tried to block its entry and prevented the launch of new technologies. The telco added that these telcos are now passing the blame and seeking relief from the government.

It is interesting to note that Jio itself has sought repayment of deferred payment liability for spectrum.

Incumbent telcos have been demanding that the period of repayment should, in fact, be extended to 20 years, the life of the spectrum.

"These three are now cartelising and seeking relief by leveraging the problems of smaller operators," Jio claimed in its presentation to the inter-ministerial group.

The 4G entrant also alleged the current stress in the sector could be equally attributed to the Cellular Operators Association of India's (COAI) anti-competitive actions over the years. The COAI is an industry lobby body for GSM telecom operators like Bharti Airtel, Vodafone and Idea Cellular. Reliance Jio is also a member of this association.

The inter-ministerial group, comprising officials from ministries of communications and finance, is set to meet telecom operators this week to discuss the financial difficulties being faced by the industry and measures that can be taken to ease the situation. Indian telecom operators are currently reeling under a Rs 4.6 lakh crore debt, and are facing pressure on profitability and revenue due to the intense competition introduced by the entry of Jio.

Reported By

Telecom Analyst

Passionately following the Indian #Telecom Industry for over a decade from Business, Consumer and a Technical perspective. My primary focus area is Consumer & Digital Experience.

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