Not investing in technology is leading to debts: Jio

New Delhi: Telecom companies have themselves to blame for, according to official sources at Reliance Jio. The telco suggested that telecom players needed to infuse funds in technology by either selling stakes or investing through internal accruals, during a meeting with an inter-ministerial group (IMG). The Mukesh Ambani-led Reliance Jio continued that telcos should focus on technology investments to leverage their balance sheets rather than at the financial difficulties. The telecom sector currently faces debts of at least 4.6 lakh crore, annual interest payment of nearly Rs. 78,000 crore and has taken a financial hit with EBITDA (Earnings before Interest, Tax, Depreciation, and Amortization) down by approximately Rs. 50,000 crore. The Cellular Operators Association of India (COAI), had in fact written to the central government seeking lower rates too. To read this story, click here An official source from Reliance Jio pointed out, “Operators (excluding Jio) need to invest Rs1,25,000 crore, payback debt and they need to invest in technology, as growth is happening in data. They can do this by selling stake.” GST although is a much needed financial reform, the source maintained that operators were facing challenges that they themselves have created, and no policy intervention could potentially help them from it. Although, lowering of levies could potentially generate Rs 20,000 – Rs25,000 crore additional Ebitda for the industry. The IMG is expected to hold similar consultation meetings with private players such as Bharti Airtel, Vodafone India and Idea Cellular as well as state PSUs such as Bharat Sanchar Nigam ltd, (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL) through the week.

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