Sunil Bharti Mittal, who controls India’s second biggest telecom network Bharti Airtel, has sought government intervention to help the telecom industry turn around its battered fortunes. “India still has some of the lowest data tariffs globally and the industry is barely able to cover the cost of capital. It requires much more support to repair the deep damage to its finances and make it viable for telecom operators to invest in future technologies,” Sunil Mittal said in Bharti Airtel’s FY20 annual report. He also said that the government must consider rationalising levies on the telecom sector along with resolving long standing legal disputes as those have proved to be a big drag on the performance of operators.
In his message to the shareholders of the company, Sunil Mittal said that while the “worst may be behind for India’s telecom industry”, it is yet to emerge from the woods. The telecom sector has been facing headwinds for some years now — first due to the entry of Mukesh Ambani’s Reliance Jio in the sector in 2016, which compelled telecom operators to slash their tariff prices; and then, due to levy of AGR dues, which meant thousands of crores of liability on telecom operators.
Three dominant telecom operators in India viz Vodafone Idea, Bharti Airtel and Reliance Jio recently hiked tariffs, and while the same has brought some relief to the telecom operators, the sector is still way below the levels to make the industry viable, Sunil Mittal said, adding that the government must “look into the urgent needs of operators”. “Urgent interventions will ensure that we have a viable industry with 3+1 structure, which is essential for serving the digital aspirations of a billion plus Indians”.
Meanwhile, Airtel raised a total of $8 billion in the last year. This includes a rights issue worth $3.6 billion, Airtel Africa IPO which fetched $674 million and FCCB worth $1 billion. The company said that with its strong balance sheet, it now looks to capitalise future opportunities.
– The Financial Express