New Delhi: Industry bodies, CII and FICCI have closed ranks and written to the Finance Minister Nirmala Sitharaman to address the situation on the precarious financial position of telecom operators with a debt of Rs 7 lakh and to ensure there is robust competition for the vibrancy in the sector.
CII and FICCI Presidents have written similar letters to the Finance Minister arguing for robust competition, which is being seen as support for beleaguered operators, Airtel and Vodafone Idea.
They have also sought relief for the telecom sector arguing that it has an impact on several sectors and the economy as a whole. The chambers have also sought a meeting with Sitharaman to propose potential remedies for the sector.
"The recent developments on the adjusted gross revenues (AGR) dues of the telecom service providers, have triggered a great deal of concern not only to the seriously affected TSPs, but also mongst others who are part of the overall telecom ecosystem. The precarious financial health of key players in this sector and their massive financial burden (estimated to be Rs 7 lakh crore), threatens not only their individual existence but also the much-needed vibrancy in this sector of national importance," CII President Vikram Kirloskar wrote to the Finance Minister.
"In this context, CII urges the Government to consider addressing the situation in a manner which continues the robust competition in the industry and ensures further investments in infrastructure for new technologies," Kirloskar said.
Kirloskar said one of the important elements of vibrancy in any sector is the presence of multiple key players. In line with this, the Government has followed a policy of encouraging healthy competition in the telecom sector, with atleast 3-4 strong players, he added.
CII has prepared a detailed note which has been sent to the Finance Minister concerning the telecom sector. CII's argument is that telecom services are a "raw material" for the rest of the economy-on which acts as a productivity-enhancer, more so with new technologies driving rapid digitalization and increased digital penetration.
FICCI President Sandip Somany has also written to the Finance Minister on similar lines. "FICCI has strongly urged the Government to take immediate steps for addressing the concerns of the sector.
FICCI has said the sector is saddled with a debt of Rs 7 lakh crore and has almost no appetite to invest in networks and future technologies.
"Adding further woes to the sector, the recent ruling on Adjusted Gross Revenues (AGR), dues of the TSPs will lead to an unfortunate and disastrous collapse of the already battered sector," Somany said.
FICCI President added that this ruling will have a cascading effect and will severely impact many other companies in multiple sectors such as Internet Service Providers (ISP), satellite communications providers, cable operators and even companies in power, steel and railways sector.
"FICCI is confident that a timely intervention and support will not only save the sector from the brink of collapse but ensure a healthy growth adding to the economic momentum of the country," Somany said.
India is the second largest telecom market in the world, with over a billion mobile subscribers. As per a BBC study, mobile data is the cheapest in India, among the 230 countries that the survey covered. The number of internet users in India is estimated to reach 821 million by 2021.