Vodafone-Idea Chairman Kumar Mangalam Birla, who has been voicing concerns over the liquidity stress telecom industry is facing, met Telecom Secretary Aruna Sundararajan to discuss the challenges.

According to various sources, apart from discussing stress in the telecom sector, Birla also discussed about annual spectrum payment, which is due in March. He requested the government to consider allowing the payment in instalments. Birla, along with other senior officials of Vodafone-Idea and Himanshu Kapania, vice-chairman at Grasim Industries (also Board member of Vodafone-Idea), met Sundararajan.

When asked about the details of the meeting, Birla refused to comment except to say ‘this is a nodal ministry for the industry’ so it was just a courtesy meeting. But, this was the second such meeting between the industry honcho and the Ministry in the last few days. He had also raised issues around high spectrum payouts and levies during his meeting, earlier this month, with Telecom Minister Manoj Sinha and Sundararajan.

Liquidity crunch

Birla, who heads the country’s largest telecom operator, had earlier expressed concerns over the severe liquidity crunch in the telecom industry and had sent a SOS to the government for deferring statutory payments as the sector was not generating enough cash even to service loans.

His key demand was further deferring of the payment schedule for spectrum, which the government leases out to telecom operators, to allow calls and data to carry from one mobile phone to another.

However, according to senior officials in the government, there is no formal request yet from the industry for such rebate, and the Telecom Department will take a view once a formal representation is made.

Hit by intense competition from Reliance Jio and regulatory uncertainty, most telcos are in turmoil as they try to retain market by matching minimum tariffs at the cost of eroding profits and growing debt.

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