Government unlikely to offer telcos relief package

NEW DELHI: The telecom department has said the government is unlikely to offer a comprehensive relief package to the debtladen sector because operators themselves are divided on the matter. Reliance Jio Infocomm maintains there is no financial stress, diverging from the views of rivals Vodafone Idea and Bharti Airtel.

“There is no common ground taken by all telcos. Therefore, the government is unable to respond on matters pertaining to financial stress and enhancement of moratorium for another two years,” a senior official of the Department of Telecommunications said on condition of anonymity. The additional moratorium sought is for spectrum payments.

Separately, the official said DoT is in talks with the revenue department to refund Rs 30,000 crore as input tax credit to the telcos.


Operators want regulatory levies made on spectrum and licence fee payments to be exempt from the goods and services tax. They are seeking a refund of input tax credit of about Rs 30,000 crore because they’re unable to set it off against GST by charging their users due to low tariffs brought on by intense competition.

“We are trying to find a way out on the GST, which is a regulatory charge, and have taken up the matter with the department of revenue to see if liquidity relief can be given,” the official said.

Acknowledging the divide, the Cellular Operators Association of India, an industry body, said Jio had a different view on the matter.

“We shall rely on the government to conduct its own due diligence on our representations and take a call,” COAI director general Rajan S Mathews said.

An email query to Jio remained unanswered. However, senior company officials told ETthat Jio disagreed with other telcos on the matter and didn’t consider the sector under stress.

Mathews, however, said such matters should not be decided on the basis of a “majority” or “minority” view but on the basis of factual evidence in line with national policy and national interest.

“Our point of view (on financial stress) has been supported and affirmed by independent organisations including public sector banks and investment bankers,” the association added.

A price war that broke out when Jio started services in September 2016 hurt the revenue and earnings of telcos and triggered a consolidation that whittled down the number of operators to three private companies.

COAI has sought urgent relief entailing debt restructuring, a cut in levies including licence fee and spectrum charges and release of GST input tax credit. The official said a review has been initiated on import duties for telecom equipment and GST refunds.

The government has formed a committee of officials from the revenue department and the IT and electronics ministry to review import duties on telecom equipment.