Reliance Jio said COAI, which represents telecoms, is misguiding the telecom industry on the Supreme Court order that forced Bharti Airtel and Vodafone Idea to pay the bulk of $13 billion in overdue levies and interest.
Recently, Airtel and Vodafone approached the India government to relax its demand for $13 billion in outstanding dues.
Cellular Operators Association of India (COAI) sought the intervention of India’s telecoms minister in a letter dated Oct 29, arguing that payments will lead to a crisis at the companies and cause distress for the sector as a whole.
“Investments could be curtailed, services could deteriorate, jobs could be lost and investor confidence will most definitely be shattered,” COAI Director General Rajan S. Mathews said in the letter. “The impact of this crisis could exacerbate the stress in the industry and potentially be catastrophic for the nation.”
Fitch Ratings has already placed Bharti Airtel’s BBB- Long-Term Foreign-Currency Issuer Default Rating (IDR) on Rating Watch Negative (RWN). The agency has also placed Airtel’s and Bharti Airtel International’s senior unsecured bonds and Network i2i’s subordinated perpetual bonds on RWN – in the wake of the uncertainty on the amount and timing of unpaid regulatory dues.
But Reliance Industries-owned rival Jio, a COAI member, said the lobby group’s letter does not represent industry views.
Reliance Jio disagrees with the intent, tone, contents and connotations of the COAI letter, Jio said in a letter to COAI.
Jio began operations in late 2016 and is least affected by the Supreme Court ruling because it has only $2 million in charges to clear.
The COAI letter said that the $13 billion demand could also place in jeopardy the 600 billion rupees ($8.5 billion) of annual payments Bharti and Vodafone Idea make to the government and threaten their ability to service existing debt.
“Such an adverse outcome will trigger a chain of events which will result in disruption to the entire business chain,” the letter said, with the COAI seeking a two-year moratorium on payments for airwave spectrum from 2020 to 2022.
A government source said on Monday that a panel of bureaucrats had been formed to suggest ways to alleviate financial pressures on the sector, Reuters reported.