Govt walking a tightrope to resolve telecom sector crisis, say sources

S Ronendra Singh New Delhi | Updated on February 20, 2020 Published on February 20, 2020

Not to invoke bank guarantees for now; Mittal meets Minister

The government is closely observing the situation in the telecom industry and looking at all options to ensure there is healthy competition among the players and there is no monopoly.

The government is also in the process of looking at other options, including invoking bank guarantees, but as a last resort. According to highly placed sources, for invoking the bank guarantee, the government needs to ensure all the pending dues are calculated circle-wise. But, as the telcos have already started paying the AGR dues since last week, the bank guarantee issue is unlikely to come up, sources said.

“The situation is very difficult right now...we are walking on a tight rope. The sector is in a critical situation and we need to find a viable solution. There should not be a monopoly situation in the industry,” an official at the Department of Telecommunications (DoT) told BusinessLine.

The official also pointed out that the situation would not have arisen had the telecom operators paid their dues on time in 2003 when the amount was a few crores. It has remained a contentious issue for more than 15 years between the DoT and telcos, both going to different forums to settle the AGR issue.

According to the official, the government is in a difficult situation right now and in a dilemma as — one, it has to follow the Supreme Court's order, secondly it has to collect money from the telcos, and thirdly it has to also keep the industry alive and in good health.

On the bank guarantee,, the official said the government cannot invoke bank guarantee, and has to think of other avenues.

Meanwhile, Bharti Airtel Chairman Sunil Bharti Mittal, who met the Minister for Communications Ravi Shankar Prasad here, said the AGR issue is an ‘unprecedented crisis’ for the telecom industry.

“The industry is heavily taxed and taxes/ levies need to be re-looked at. There needs to be a rationalisation of taxes. The industry is left with very less revenues in the kitty and that needs to be addressed. And more importantly, the AGR issue needs to be addressed,” Mittal told reporters after meeting Prasad.

He also said the companies are committed to comply with the Supreme Court (SC) judgment and have started to make some payments, and the balance amount will be paid well before the next hearing of the court on March 17.

When asked if Airtel was seeking more time for the payment, Mittal said, “We are not. We will pay much before March 17.” But he said the company was making its ‘own calculations and will submit the payments accordingly’.

The Telecom Minister also met RS Sharma, Chairman, Telecom Regulatory Authority of India (TRAI), and Anshu Prakash, Secretary, DoT, to discuss various issues.

Published on February 20, 2020
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