Sunil Mittal: Telecom Industry Needs Support to Maintain 3+1 Structure

Bharti Airtel Chairman Sunil Mittal has expressed hope that the government and regulators will step in to ensure the telecom industry remains a viable place for continued investments and asserted that the sector requires "long overdue" support to maintain its current 3+1 structure.

Telecom Industry Needs Support: Sunil Mittal

Mittal noted the transformational role telecom sector had over the last 25 years for the Indian economy; he termed it as an "outstanding feat" as well. The telecom mogul said that issues such as unsustainable pricing and low returns in a highly capital-intensive environment, coupled with legacy legal issues "have extracted their toll".

"We have the opportunity to transform India into a global leader in the digital economy. We must continue to evolve our policies to realise these opportunities while encouraging investments, entrepreneurship and innovation through collaboration," Mittal said, adding that Airtel is ready to play its part.

"As the Indian economy digitises further, there are large opportunities ahead in areas such as data centres, submarine cable deployment, cloud services and cybersecurity. We will look to scale up our investments in these areas in the coming fiscal," Mittal noted.

In Airtel's 20-21 annual report, Sunil Mittal said, "the industry requires long overdue support to maintain its current 3+1 industry structure and allow players to earn a respectable return on their investments". In the statement, he referred to the 3 private telecom players and 1 state-owned one.

Airtel's Putting its Strong Foot Forward

Mittal mentioned his telco's capacity to develop world-class platforms and digital solutions; referring to the in-house engineering talent and strong partnerships with players. These include Amazon, Google, Verizon, Ericsson, Nokia, Qualcomm, Intel, IBM, Cisco and Apollo Hospitals.

"The Board of Directors had approved the above on account of the enhanced role and split duties of Sunil Bharti Mittal towards overseas operations/subsidiaries of the company. The total remuneration fixed, including from subsidiaries, remains unchanged from last year," the report said. The telco has plans to reinstall Sunil Mittal as chairman again; it will seek the approval of the shareholders for the same. Bharti Airtel will look to do the same at its AGM on 31st August.

The Airtel Board of Directors have already approved the reinstatement of Sunil Mittal as the Chairman on May 17th. The board has approved the same in an executive capacity starting 1st October, 2021, for 5 years.

Vodafone Idea situation concerning for the Telecom Industry

The comments come in light of Vodafone Idea's significant and dire financial struggles. The third largest telco finds itself in an existential crisis, a struggle that has seen a lot of fallout these past few weeks. Earlier this month, Kumar Mangalam Birla resigned from his post as Chairman at Vi. A couple of months ago, Birla had offered his stake to the government to make sure the telco stays afloat.

Vodafone Idea has an AGR liability of ₹58,254 crore, of which it has paid ₹7,854.3 crore. The telco's gross debts exceeds ₹1.8 trillion as of March 31, 2021. This amount includes deferred spectrum payment obligations of ₹96,270 crore and a debt of ₹23,080 crore from banks as well.