Telecom sector is heavily burdened with tax, 40k more job cuts likely this year: Anil Ambani
Jun 2, 2017, 18:11 IST
Reliance Communications Chairman Anil Ambani said the telecom sector is heavily burdened with tax and the Indian Government should consider providing a three-year moratorium on increased Goods and Services Tax (GST), which is scheduled for July 1 rollout.
While addressing a media briefing, Indian tycoon Ambani, whose RComm is laden under debt giving nightmares to banks, said telecom sector has no money for government’s airwave auction.
Ambani said telecom companies’ total bank loans stand at Rs 2.8 lakh crore.
Ambani said there is a huge competition in data and voice tariff space and “free plan wars” in September led to high competition.
“Telecom sector has cut 10,000 jobs last year and the stress will further lead to reducing 30,000-40,000 jobs more this year,” said Ambani.
He held the media briefing to assure investors amid the debt load and ratings downgrades.
Ambani, 57, said lenders had accepted plans presented for debt reduction and formed joint forum.
“Company to get standstill on debt obligations for seven months. I believe both Aircel and Brookfield deals will reduce debt by 60%. Reliance Communications will hold 50% stake in new wireless company Aircom and we are confident we will complete all transactions ahead of time,” said Ambani.
RCom has seen its market value slashed by a third after shares have plunged since May 5 when ratings agency ICRA downgraded its debt over concerns about its profitability and debt loads.
“We are disappointed at recent downgrades by rating agencies. We are committed to restoring credit ratings at the earliest. Rating companies’ expectation of intensive price-competition is there to stay,” he said.
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While addressing a media briefing, Indian tycoon Ambani, whose RComm is laden under debt giving nightmares to banks, said telecom sector has no money for government’s airwave auction.
Ambani said telecom companies’ total bank loans stand at Rs 2.8 lakh crore.
Ambani said there is a huge competition in data and voice tariff space and “free plan wars” in September led to high competition.
“Telecom sector has cut 10,000 jobs last year and the stress will further lead to reducing 30,000-40,000 jobs more this year,” said Ambani.
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Ambani, 57, said lenders had accepted plans presented for debt reduction and formed joint forum.
“Company to get standstill on debt obligations for seven months. I believe both Aircel and Brookfield deals will reduce debt by 60%. Reliance Communications will hold 50% stake in new wireless company Aircom and we are confident we will complete all transactions ahead of time,” said Ambani.
RCom has seen its market value slashed by a third after shares have plunged since May 5 when ratings agency ICRA downgraded its debt over concerns about its profitability and debt loads.
“We are disappointed at recent downgrades by rating agencies. We are committed to restoring credit ratings at the earliest. Rating companies’ expectation of intensive price-competition is there to stay,” he said.
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