Jio writes to Centre, objects to relief sought by Bharti, Vodafone

‘Both operators have financial capacity to clear dues’

The tussle between Reliance Jio, Bharti Airtel and Vodafone Idea has now reached the government’s doorstep.

In a letter to Telecom Minister Ravi Shankar Prasad, Reliance Jio has strongly objected to the relief sought by the other two players, stating both Bharti Airtel and Vodafone Idea had the financial capacity to clear their liabilities to the government.

Court order

A recent Supreme Court order had upheld the Department of Telecom’s (DoT) calculation on adjusted gross revenue (AGR). As a result, telecom operators have to pay the government more than ₹90,000 crore. While Bharti Airtel’s will have to pay ₹42,000 crore, Vodafone Idea’s liabilities stand at ₹40,000 crore.

Reliance Jio’s letter comes a day after the latest entrant to the sector wrote to the Cellular Operators Association of India (COAI), accusing it of dispatching a late-night communique to the government without waiting for its comments.

“We submit that COAI’s intent of using this as an opportunity to seek non-enforcement of the Supreme Court judgment and asking for relief is strongly objected to by RJIL (Reliance Jio Infocomm Ltd.).

“These operators have the capacity and enough monetisation possibilities to comfortably pay government dues,” it said in the letter to Mr. Prasad.

Stating that Reliance Jio strongly disagreed with COAI submission that in the absence of immediate relief by government, the telecom sector would collapse and there would be unprecedented crisis in the sector, it said

“...COAI has used threatening and blackmailing tone with the government by referring to possible job loss, QoS loss and loss of investments in the sector... We request the government to strongly rebuff such suggestions and insinuations.”

The affected operators, it said, can pay their dues by monetising their existing assets/investments and by issuing fresh equity in their companies, Reliance Jio said. It alleged that the two service providers had made “multi-million dollars” of profit, post investing the proceeds from the telecom business, including the regulatory levies withheld for decades.

In added that in the unlikely event of the “failure of two operators,” it will not have an impact on the sector dynamics with the “existence of vibrant competition, including the presence of the PSUs and there is no restriction on entry by new operators.” There will be no impact on the digitisation and government programmes, it asserted.

“The extraordinary scenario painted by COAI ... is just a machination to extract the relief from the government, when all their legal recourses have expired...we believe that they are internally also prepared for this but are currently just forum-shopping to get relief by threatening the government, when the talks of perceived global economic slowdown and job-loss are already in the air,” it said.