Fall in revenues to impact telcos investment capacity

Mounting debt may hit sector's growth

Fall in revenues  to impact telcos investment capacity

The decline in telecom operators’ revenues due to falling tariff, impacts their capacity to invest in the sector, Telecom Minister Manoj Sinha informed the Rajya Sabha on Friday.

 “The decline in revenue impacts their capacity to invest and this can also lead to delay in spectrum payment,” the minister said. 

“As of now, there is no delay in spectrum payment to the government and all the deferred payment dues of 2012, 2013 and 2014 auctions have been realised by their respective due dates. There has been no default in repayment of loans by telecom service providers so far,” Sinha added.

 With the industry having Rs 4.6 lakh crore debt, analysts have apprehended that mounting debt may hit the sector’s growth and also will lead to set back to promote Digital India programme.  

 Recently, former telecom secretary J D Deepak, as a chairman of the Telecom Commission, has written to Trai expressing concern over downward trend in the government’s revenue because of “a tariff war” in the industry triggered by free promotional offers by companies.

 He was apparently referring to Reliance Jio’s  free voice and data under two promotional offers — Jio Welcome Offer and the Happy New Year offer.

 The Telecom Commission’s letter had noted that licence fee collections for the current fiscal have been showing “alarming” downward trend on a quarter-to-quarter basis.

Trai rejects Telecom Commission’s contention on promo tariffs

Telecom regulator Trai has rejected Telecom Commission’s contention that free promotional offers allowed by it are responsible for the industry’s falling financial health and lower licence fee payments to the government.

Trai is drafting a response to Telecom Commission’s letter dated February 23 on the lines that tariff and tariff orders, solely under the regulator’s purview, need to be seen in the broader context of consumer interest. The telecom regulator is likely to send next week its response to the Telecom Commission, the highest policy making body of the sector.

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