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Mukesh Ambani has ‘good news’ for mobiles users, ‘bad news’ for Airtel, Vodafone Idea

 

 

  • Speaking at the India Mobile Congress, Mukesh Ambani said Jio will continue to expand, and with affordable tariffs
  • Ambani's enthusiasm was not matched by competing and older telecom companies, which spoke about difficult financial position in the sector
Reliance Jio chairman Mukesh Ambani on Thursday made it clear that there will be no let-up in the intense tariff war within the telecom industry, while rivals Vodafone-Idea and Airtel - reeling under heavy losses due to the new entrant's dirt-cheap consumer plans - sought the government's support through lower taxes and easier spectrum charges to make business financials sustainable.

Speaking at the India Mobile Congress here, Ambani said Jio will continue to expand, and with affordable tariffs. "Imagine what this 5-in-1 (device with access to music, video content, camera and internet) means for the aspirational explosion in India. And, imagine how it can transform India when it becomes 6-in-1... with Indians getting the revolutionary power of first artificial intelligence in their hands. All this at only Rs 100 per month," Ambani said.

Ambani's enthusiasm was not matched by competing and older telecom companies, which spoke about difficult financial position in the sector.

Bharti Airtel chairman Sunil Mittal said taxation in the industry remains very high, almost equivalent to charges on tobacco players, who fall under the so-called 'sin-tax' regime. "On one hand, it's a very important industry that is enabling Digital India, but on other hand, this industry remains taxed like the tobacco industry. This really needs to be resolved."

Mittal said while the new telecom policy makes it clear that revenue maximisation is not the objective of the government, there are still nagging issues through which the industry's finances are locked. "The question is why are the industry and telecom department locked in hundreds of litigations around only one objective - of revenue maximisation. This also needs to be taken up in the right spirit... (also) spectrum prices should become affordable, taxation, licence fee and spectrum charges should become reasonable and affordable. The GST is at 18%, which is almost at the highest tax bracket," said Mittal.

Vodafone also spoke about tough financial conditions. "Tariffs are unaffordably low... Whole industry is bleeding, we are trying to re-discover how to bring costs down," Vodafone-Idea CEO Balesh Sharma said. "It is bad," he said, when asked about the financial position of the industry.

The telecom industry currently reels under a debt of over Rs 7 lakh crore and telecom secretary Aruna Sundararajan said that the government is looking at providing relief to the industry through a series of initiatives. This could include rationalisation of some of the taxes.

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