Jio Writes To Govt.: Failure To Pay Dues Won’t Hit Sector Adversely

Strongly opposing any bailout at taxpayers’ expense of the telecom operators who have been ordered by the Supreme Court to pay their licence fee dues, Reliance Jio on Thursday wrote to telecom minister Ravi Shankar Prasad saying the concerned incumbent firms have sufficient financial capacity to clear their liabilities.

The company also slammed the Cellular Operators Association of India (COAI) for writing ex-parte to the government on the financial distress in the sector and stating that if no relief is provided the sector would collapse. It has argued that even an unlikely event of failure of two operators will not have an adverse impact on the sector dynamics, given the existence of vibrant competition including presence of the PSUs as well as absence of any restriction on entry of new operators.

“COAI is clearly insinuating that if the immediate relief by doing away with all legal financial obligations emerging from the Supreme Court’s judgment in adjusted gross revenue case is not provided, the two operators might stop operations,” it wrote.

“We request the government to strongly rebuff such suggestions and insinuations,” Jio wrote.

It said that that the COAI was blackmailing to extract relief from the government after all legal recourse had expired.

“We submit that the so-called affected service providers have sufficient financial capacity to pay the government dues by monetising their existing assets/investments and by issuing fresh equity in their companies,” Jio wrote in the letter to Prasad.

It further said that it “strongly disagrees with COAI submission that in absence of immediate relief by the government the telecom sector will collapse and there would be unprecedented crisis in the sector as two of the three private operators will be facing extreme financial crisis”.

“We submit that COAI has used threatening and blackmailing tone with the government by referring to possible job loss, quality of service loss and loss of investment in the sector and its contentions border on contempt of Supreme Court judgment, especially when the Supreme Court has prescribed three months’ time to deposit the due amount,” Jio wrote.―Financial Express