Bharti Airtel Chairman Sunil Mittal and Reliance Jio Infocomm board member Mahendra Nahata met telecom minister Manoj Sinha on Thursday to update him on the status of their businesses at a time of severe financial stress in the industry. Jio’s senior official apprised the minister about the new 4G VoLTE feature phone that the telco is expected to launch shortly, government sources said. Nahata is also said to have informed the minister about the company’s operations and expansion.
Details of Mittal’s discussions with the minister were not available. Jio and Bharti Airtel did not comment on queries about the discussions.
The Jio official “gave an update on the company’s network rollout, spread of services and its rising subscriber base,” said a person aware of the discussions. Jio, which started services in September with free voice and data offers, started charging for data in April and had more than 117 million subscribers by May. Earlier this week, the telco increased the effective rate of its data plans. Voice calls remain free on its network.
“They (Jio) also discussed the new feature phone,” the person said. The 4G VoLTE feature phone could bring in the second wave of disruption in the telecom market later this month, with brokerage houses estimating the device’s price at Rs 500 apiece.
An inter-ministerial group is looking into the financial issues of the debt-laden telecom sector, which companies peg at about Rs 5 lakh crore and banks estimate at about Rs 7.29 lakh crore, including borrowings for spectrum and bank guarantees.
The group – comprising of members of the telecom, finance, revenue and economic affairs departments – is expected to give its report on ways to improve the financial health of the sector before the end of this month.
Telcos including Bharti Airtel, Vodafone India and Idea Cellular had sought a reduction in the licence fee. They wanted the USO levy and spectrum usage charge to be cut and eventually scrapped. They asked for the interconnect usage charge of 14 paise per minute to be increased to cover costs and proposed a floor rate for voice calls, text messages and data services.
ET reported earlier that the telecom department was considering extending the term for deferred payments for airwaves, lowering the interest levied on such payments, and reducing the universal services obligation (USO) levy, solutions that would aid the sector and yet be revenue-neutral. - ET