Sunil Bharti Mittal, chairperson of Bharti Enterprises, has said that long-standing legal disputes and regulatory levies are dragging down the performance of Indian telecom companies. In a message to Bharti Airtel shareholders, the billionaire entrepreneur said that India's telecom industry, which is yet to emerge from the woods, requires much more support to repair the deep damage to its finances and make it viable for operators to invest in future technologies.
He said that India still has some of the lowest data tariffs globally and the industry is barely able to cover the cost of capital. Though the recent tariff increase has provided some cushion to the industry, we are still way below the levels to make the industry viable, Mittal added.
"The government must also look at rationalising the levies on the sector and close long standing legal disputes that are a big drag on performance of operators," Mittal told shareholders in its annual report for FY19-20.
"These urgent interventions will ensure that we have a viable industry with 3+1 structure, which is essential for serving the digital aspirations of a billion plus Indians," he added.
Lauding the government's decision to declare telecom as an essential service during the COVID-19 lockdown, Mittal said the industry has finally got some of the recognition it deserves and given the commendable job it has done to keep India connected. He urged the government to look into the urgent needs of the operators.
Commenting on the Bharti group's financial health, Mittal said there was attention towards strengthening the balance sheet in a timely manner. The year witnessed massive fund raise initiatives by the company totalling over $8 billion, including rights issue ($3.6 billion), Airtel Africa IPO ($674 million), Perpetual bond ($1 billion), QIP ($2 billion) and FCCB ($1 billion).
"Now, with a strong balance sheet accompanied by a best-in-class network and a robust spectrum portfolio, Airtel is well positioned to capitalise on future opportunities," he said.
Bharti Airtel closed the financial year 2019-20 with a consolidated net loss of Rs 32,183.2 crore on account of provisions for statutory dues and higher finance costs. Consolidated net debt excluding lease obligations for the company stands at Rs 88,251.20 crore as on March 31, 2020 compared to Rs 108,234.6 crore as on March 31, 2019.
On 5G network, Bharti Airtel said in its annual report that the company is in "continuous pursuit" to upgrade existing 4G base stations with 5G capabilities to be future ready, and is "conceptualising 5G trials" in association with OEMs and application developers.
By Chitranjan Kumar