Reliance Jio blasts COAI for propagating doom of telecom sector after SC order on AGR

Reliance Jio Infocomm Ltd (RJIL) on Wednesday lashed out at the Cellular Operators Association of India (COAI) for writing to Union Telecom Minister Ravi Shankar Prasad alleging unprecedented crisis in the sector without waiting for its divergent views.

"We fail to understand the need and undue haste in issuing the letter at midnight. This is a serious breach of trust on your part. We take strong exception to such action and request you to share RJIL's divergent view with the minister with a follow-up letter today itself," Jio said in the letter addressed to COAI Director General Rajan S Mathew.

The move comes a week after the Supreme Court sided with the government's definition of adjusted gross revenue (AGR) that all revenue from telecom companies will be used for calculating the AGR. The court rejected the argument of incumbent telecom operators (mainly Vodafone, Idea and Bharti Airtel) that the AGR only included license and spectrum fees.

The COAI has said the apex court's decision will negatively impact incumbent operators by over Rs 92,000 crore and is the last straw in contributing to financial distress.

RJIL said the judgment of the Supreme Court is final and to be implemented as law of the land.

"These operators have the capacity and enough monetisation possibilities to comfortably pay government dues. COAI should ask its members to stop blaming the Supreme Court, respect its judgement and stop forum shopping for relief," reads the letter.

Jio said it takes strong umbrage at COAI exploiting the legitimate pay-out obligations to create alarmist propaganda for the doom of telecom sector. Actually, it appears that this sum was used for expanding some other business as per their commercial decisions.

RJIL said its promoters have made an equity investment of Rs 1.75 lakh crore in the sector while equity investments by Airtel and Vodafone-Idea have been inadequate, keeping in view the network requirements. "Therefore, the failure of these operators cannot be blamed on the government."

RJIL said COAI's references to predatory pricing display the lack of application of mind and show the repetition of foolhardy approach of keep on agitating settled issues in all legal forums. "This approach alone led to this so-called financial disaster in AGR case as well.