Mukesh Ambani owned Reliance Jio today said that telecom operators are not investing in new technology and instead leveraging their balance sheet for financial woes in the industry.
The company also said that incumbent telecom players need to raise funds by selling the stake at inter-ministerial group( IMG) meeting.
"Operators (excluding Jio) need to invest Rs. 1,25,000 crores, pay back debt and they need to invest in technology, as growth is happening in data...they can do this by selling a stake," said a senior Jio official who did not want to be named, PTI reported.Stating that the financial stress being faced by operators was "their own creation", the official said the only policy intervention required is in form of reduction in GST rates, license fee, and USO levies. Lowering of these levies can generate Rs. 20,000-25,000 crores additional EBITDA for the industry, the Jio official said after coming out from the 45-minute meeting with the IMG.
The IMG has constituted to suggest reforms in the telecom sector.
The sector is in under pressure due to increasing pressure after the entry Mukesh Ambani-led Reliance Jio and a debt of about Rs. 4.6 lakh crore. Telecom Minister Manoj Sinha has recently said that Government will intervene "at the right time in a right manner".
He said, "the Government is aware and concerned about the sector, we will intervene at the right time in a right manner, we have also set up an inter-ministerial committee to look into the financial woes of the telecom sector." Added that the industry has faced the same situation earlier in 2003.
Sinha further added that the market is very big and which is transforming into data-centric from voice-centric.
The Minister has also advised the telecom players to talk to the banks about their borrowings, and if any restructuring could be done As banks have recently raised an alert after the loan to the sector crossed Rs 8 lakh crore.