Reliance Jio has approached Universal Service Obligation Fund administrator Sanjay Singh, telecom minister Manoj Sinha and telecom secretary Aruna Sundararajan to remove tender conditions that support the use of 2G technology for India government funded mobile service projects.
Reliance Jio, the largest 4G operator in India, in a letter sent, said the existing tender norms will support incumbent mobile operators and cause financial loss of around Rs 5,000 crore to the public exchequer, PTI reported.
The use of 2G technology means the government will be forced to select mobile operators such as Bharti Airtel, Idea Cellular, Vodafone and BSNL for government funded telecom projects. Reliance Jio, which started telecom operations in September 2016, does not have any 2G or 3G business in India.
“We are disappointed by USOF Administration’s decision to continue with extremely unfair, arbitrary, discriminatory, restrictive and retrograde mandate to use 2G technology for voice in its recent tender for Andaman and Nicobar Islands despite numerous reasons for not mandating a legacy technology,” Jio said in the letter dated June 25, 2018.
The department of telecommunications (DoT) in June first week invited bids to install 214 mobile towers in Andaman and Nicobar islands in uncovered villages and on national highways for providing 2G and 4G services.
The project will be funded by the government through USOF, which is corpus created from money paid by telecom subscribers as part of their every call.
Jio said that mandatory 2G rollout is discriminatory in nature and is bound to prohibit participation of 4G operators in the bid.
Jio in the letter alleged that the project with mandatory use of 2G technology will be used by incumbent operator with 2G networks to deploy their old and wasted network equipment in ANI while they upgrade their networks to 4G in other parts of the country.
The USOF wing, which is managing the project, has also proposed similar clause for telecom connectivity project in naxal affected states and unconnected villages in the Northeast.
Reliance Jio representatives in pre-bid meeting held on June 19 alleged that the extension of clause for telecom infrastructure rollout project in naxal affected area and Meghalaya alone will add to Rs 5,000 crore financial loss to the public exchequer.
Reliance Jio said the restriction on latest technology would also impact cost efficiencies as there will be at least 30-40 percent incremental cost addition. For example, in ANI tender, the government could save around Rs 100 crore and possibly more, if this restrictive condition of the tender gets removed.
Some of the Indian telecom operators have already shut down over 75,000 mobile towers on 2G technology.
Reliance Jio said the present bid condition for mandatory 2G technology rollout is bound to cause additional losses in both Capex as well as Opex.
Jio played down arguments of USOF, which comes under the telecom department, that 2G is required for economical handsets and point-of-sales machines.
Reliance Jio said that areas to be covered under USOF project are uncovered and therefore there is no likelihood of any customer within these areas holding a 2G only handset and at present there is almost nil differential in 2G and 4G handset prices.
