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Journalism of Courage
February 5: The telecom industry is on the verge of a vertical split with many cash-rich operators willing to pay up 20 per cent of their licence fee by the February 15 deadline set by department of telecom.
Companies like Bharti Telecom, Tata Cellular, Reliance Telecom and BPL Cellular are likely to pay up, despite the united front put up by the apex industry associations like Cellular Operators Association of India COAI and Association of Basic Telecom Operators ABTO.
Sources said they would not want to get into an open confrontation with the government over the issue and witness encashment of their bank guarantees.
Bharti Telecom managing director Sunil Bharti Mittal gave ample indication to this effect when he said, 8220;I have no problems in paying up, as the amount in my company8217;s case is very little8221;. Bharti is required to pay Rs 6.14 crore for its Delhi cellular licence 20 per cent of total outstanding of Rs 37.2 crore. It will also have to pay Rs 4.10 crore for the basic licence in Madhya Pradesh.
Tata Cellular owes Rs 100 crore to the government as its third year licence fee dues with interest. According to chief executive officer Richard French, the company will take a final decision on February 13. The option of paying up was one of the many. 8220;If that is a quid pro quo for getting reasonable licence conditions, then we could pay up,8221; he said
8220;We might do so provided DoT makes a clear commitment to legislatively strengthen Telecom Regulatory Authority of India and the government makes a clear statement of the terms and conditions to be applied in future,8221; said French.
Escotel has already paid over 50 per cent of its dues till September. Dubbing the DoT demand reasonable, Escotel CEO K Vijay Rao said, 8220;most of us feel that the government8217;s move is well-intentional, but it is not fully clear as to how it can be applied across the entire industry. What about companies like us who have paid more than 20 per cent, will the government refund that amount to us? Why hurt good companies?8221; he questioned.
According to him, the companies will need to give guarantees for the balance. But they are not in a position to securitise and have little to offer by way of hypothecation. Even the shares of the most operators will not fetch much value.
8220;Extension of licences to 20 years is a comforting thought, but the FIs and banks are waiting and watching the situation and till government formulates a clear stand on issues, they are not willing to securitise the companies. The government ought to have a formula of hypothecation other than bank guarantees,8221; he said.
In its response to the government, COAI has reiterated that it will not be able to pay even 20 per cent of the dues until the government honoured its commitment of finding a lasting solution for the companies, according to executive chairman TV Ramachandran. While questioning the procedures, the COAI has appealed to Prime minister to look into its genuine8217; problems.
That the government is not in a mood to relent on the issue has obviously dawned on the operators. Further indication, if any was required, came at a high-profile seminar on new telecom policy sponsored by CII and Ficci on Friday which was well-attended by the industry, but ignored by the communications minister.
Though most of the operators contacted by The Indian Express8217; parried pointed queries about whether they would toe the government line, they bitterly criticised what they called 8220;strong-arm tactics8221; of the government.
There is also sharp resentment among the industry over the draft discussion paper and they feel the group on telecom did not take into consideration the inputs provided by them over the last two months.
8220;Prime minister Atal Bihari Vajpayee himself made a commitment last fall to resolve the outstanding issues. With such a haf-hearted response and obduracy on the part of the DoT, I am bitterly disappointed. What do you say when the PM is unable to pursue to his own communication minister in meeting his commitment?8221; questioned Richard French.
8220;They should first make up their mind as to what is the policy situation which will not be ambiguous and remain in force for next few years and not change from minister to minister,8221; he quipped.
