Jio Advises Airtel, Vodafone Idea How to Raise Money

Supreme Court had last month ordered Bharti Airtel and Vodafone Idea to pay Rs. 49,990 crores.

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Jio Advises Airtel, Vodafone Idea How to Raise Money
Highlights
  • Jio opposed any move to provide relief to rival telecom operators
  • The telecom operators have been asked to pay $7 billion in past dues
  • Airtel can raise Rs. 40,000 crores by selling some of its assets: Jio

Billionaire Mukesh Ambani's Reliance Jio Infocomm opposed any move by the government to provide financial relief to rival telecom operators, which have been ordered to pay $7 billion in past dues, saying they had adequate recourse to funds. Bharti Airtel can easily raise Rs. 40,000 crores ($5.7 billion) by selling some of its assets or shares, while Vodafone Idea has no dearth of resources to pay the government its dues, Reliance Jio said in a statement dated November 1 and issued Sunday.

India's top court had last month ordered Bharti and Vodafone Idea to pay Rs. 49,900 crores.

If Airtel liquidates “small parts of its assets or issues 15 percent-20 percent new equity,” in its Indus Tower business it can easily raise the funds, Kapoor Singh Guliani, president for regulatory affairs at Reliance Jio, said in the letter. Vodafone India also has stake in Indus Towers, “thus there is no dearth of sources to pay” their dues, he said.

Airtel's tower business operates more than 163,000 mobile-phone towers across India.

The letter addressed to India's telecom minister comes after a government panel agreed to examine Bharti, controlled by billionaire Sunil Mittal, and Vodafone's demand for reducing the spectrum usage levies and the Universal Service Obligation Fund charge. The two carriers are struggling, with Vodafone Idea, led by billionaire Kumar Mangalam Birla, posting 11 straight quarters of net losses and Bharti slipping into its first-ever loss in the June quarter.

Reliance separately cited a Supreme Court verdict that held spectrum as a finite resource and its distribution should not be made in a manner that's detrimental to public interest.

All operators should be mandated to deposit applicable amounts within the three-month time period, as mandated by the court, Reliance said.

© 2019 Bloomberg LP

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