You are here: Home » Companies » News » Telecom
Business Standard

Reduce interest on spectrum payment, not mobile termination charges: Voda

The company mentioned it has invested over Rs 1,34,000 crore in India to build its mobile network

IANS  |  New Delhi 

Photo: Shutterstock

With the inter-ministerial group (IMG) on telecom expected to submit its recommendations soon, Group Chief Executive Officer (CEO) has urged the Indian government to reduce on deferred payments and appealed that mobile termination charges (MTC) be not reduced further.

In a letter dated Aug 22, a copy of which is available with IANS, has written to Communications Minister saying that: "We hope that the IMG will recommend a reduction in the for deferred payments to 6.25 per cent in line with the improved trends and an increase in the period of payment for "

The company mentioned it has invested over Rs 1,34,000 crore in India to build its

The letter said: "On mobile termination charges, we are seriously alarmed to see reports that the Regulator is considering a reduction in at a time when the industry is facing such immense hardships. Any reduction in risks large scale site shut-down of already unprofitable sites in rural India and which would greatly diminish the population coverage of mobile telephony."

The task of the IMG is to examine systemic issues affecting viability and repayment capacity of the telecom sector and furnish recommendations for resolution of stressed assets.

The group, comprising officials from the Finance and Telecom Ministries, was set up after top banks expressed concern about financial stress in the industry.

"We request your urgent intervention to safeguard the future of the telecom sector and ensure that there should be no further reduction in as it would destabilise the sector, defeat government's rural coverage objectives and cause huge inconvenience to citizens, in particular, in rural India," said.

He added: "We reiterate our long-term commitment to the government vision of and request your urgent intervention and consideration of our above submissions."

Taking a dig at Reliance Jio, he said: "There is a view being propagated by the new entrant that as a 4G-only operator, it has a cost advantage in the region of 70 per cent compared to the established 2G/3G/4G operators. There is no evidence -- either Indian or international — to support such a claim."

"It is also clear from the (Telecom Regulatory Authority of India) industry workshop on MTC, that Reliance Jio has assumed continued growth of an implausible level of paid traffic on its network. However, the present traffic levels are a result of extreme promotional activity and generated by incurring huge losses, " Colao added.

"Reliance Jio is also assuming that it can recover its costs many years into the future. However, continued under-pricing of services leads to a rapidly increasing cost per subscriber, recovery of which will require higher ARPUs in future, which is unfeasible/ unrealistic. It is undesirable for a critical core industry like telecom to be regulated based on the ambition of a new operator with no history of financial sustenance."

First Published: Sun, August 27 2017. 18:02 IST