MUMBAI: Even as India's attorney-general cleared a Rs 3,050 crore penal action against the leading telcos, Reliance CMD Mukesh Ambani is planning to infuse Rs 30,000 crore in Reliance Jio telecom venture which has caused a major disruption in India's fiercely-competitive mobile market.
The attorney-general is understood to have opined that the Department of Telecom (DoT) has the power to impose penalty on grounds of poor quality of service of telecom operators Vodafone, Bharti Airtel and Idea Cellular, sources told PTI.
Reliance Jio, which reportedly had a subscriber base of 72.4 million at 2016-end, plans to collect funds via a rights issue that was approved at a recent board meeting, the Times of India reported.
In view of the unprecedented customer response and to address the anticipated growth in demand for digital services, Jio stated, additional investments were proposed to be made into the network to enhance its capacity and coverage. The new funds will come on top of the Rs 1.7 lakh crore that Reliance Jio has already invested.
The rights issue has been planned to be for six billion nine per cent non-cumulative optionally convertible preference shares (OCPS) of Rs 10 each for cash, at a premium of Rs 40 per OCPS. The amount subscribed/paid on each OCPS will be either redeemed at Rs 50 or converted into five equity shares of Rs 10 each at any time at the option of the company, but not later than 10 years from the date of allotment.
The new entrant Jio caused a considerable disruption in the space. In broadband services, with 35.94 million (3.594 crore), Jio had, in October 2016, joined the top five subscribers list. No matter it is working out to the benefit of the consumer and helping the industry expand albeit at a much lower cost to the end-user, well-entrenched rivals now are on a slippery wicket. Meanwhile, other telecom operators in the country are scrambling to catch up.
Telecom tribunal TDSAT has ordered the Telecom Regulatory Authority of India (TRAI) to take a stand on Reliance Jio’s free 4G offer in reasonable time. A tribunal bench heard arguments of both sides — TRAI and Airtel -- and posted the matter for 1 February.
Reliance Jio earlier chose not to respond to queries regarding its reply to TRAI in connection with questions raised against alleged violations in extending its free offer till 31 March 2017 much beyond its introductory offer. Airtel had filed a petition before TDSAT accusing TRAI of being 'sleeping trustee' and a 'mute spectator' to the violations carried out by Jio.
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