Telecom tycoon Sunil Bharti Mittal wants the current market structure with three private operators to continue, highlighting that the telecom sector is passing “through its most difficult period” in the past 25 years. Bharti Airtel chairman Mittal has also urged the government and the judiciary to give a relief on adjusted gross revenue (AGR) based dues of Rs 43,000 crore.
Earlier this month, the country’s oldest private telecom operator had said it would raise up to USD 3 billion (about Rs 21,500 crore) through a mix of equity and debt, as it looks for ways to clear the overdue fees it owes the government.
“The situation is dire — it is a matter of survival for everyone. Vodafone (Idea) is in losses, Airtel is in losses, (state-owned) BSNL (Bharat Sanchar Nigam Ltd) is in losses. There is one competitor who has unlimited access to finances — I wouldn’t comment on that but the situation is bad,” according to the Economic Times which quoted Mittal as saying after meeting Department of Telecommunications (DoT) secretary Anshu Prakash.
Emphasising that the national telecom regulator (Trai) needs to fix a floor price for tariffs, the telecom czar mentioned that it is required for the average revenue per user (ARPU) to grow to Rs 200 initially, and to Rs 300 over time, for the industry to get back on track.
“It is absolutely essential that we have three (private players) plus one (state-run) players. Lower the taxes and find ways and means to support the sector in one form or the other,” he told the business daily.
Mittal acknowledged that Bharti Airtel’s legal team probably failed to convince the top court on the irrationality of DoT’s AGR interpretation. Expanding his arguments, he stated that the DoT “didn’t realise the unintended consequences” on the larger ecosystem, mentioning that the Centre should have a “sympathetic view” towards the telcos.
The Bharti Airtel boss said his remarks were in the context of comments earlier made by both Vodafone Group CEO Nick Read and Vodafone Idea chairman Kumar Mangalam Birla, both of whom have said lately that the telco may have to shut if there is no relief on the AGR based dues that the company has to pay by January end.
Last month, the government provided a two-year moratorium to telecom firms for their pending spectrum auction instalments for the years 2020-21 and 2021-22.
Bharti Airtel posted a net loss of Rs 23,044 crore for the quarter ended September 30, on Rs 28,450 crore provisions towards AGR dues. – Times Now News