Categories
Editorial

Reliance vs Farmers’ Protests

Telecom towers are an essential infrastructure that supports the continuous expansion of telecom companies. Major players such as Reliance Jio, Vodafone Idea, and Bharti Airtel operate tens of thousands of towers across urban and rural areas of India. There are over 5 lakh mobile cell towers that play an important role in accelerating the digital revolution in our country. 

Recently, we have come across reports stating that thousands of telecom towers have been vandalized by farmers in Punjab. Most of these towers were operated by Reliance Jio. Let us understand the reasons as to why Reliance has been facing the heat of the farmers’ protests. We shall also discuss the important developments that have taken place over the past few days.

The Telecom Tower Vandalism

On December 28, major news publications came up with a very shocking report: The farmers and support groups protesting against the Government’s new farm laws have damaged around 1,500 mobile towers of Reliance Jio Infocomm Ltd in Punjab. More than 176 signal transmitting sites were vandalised on a single day- December 27. They disconnected the power supply to the towers and cut fibre cables. The mobile and internet services of the company had been disrupted in the state, causing inconvenience to its consumers. The violent act by farmers also became a threat to the employees and technicians who were running the telecom towers.

The Chief Minister of Punjab, Capt. Amarinder Singh, directed the police to take strong action against anyone destroying telecom towers in the state. The Cellular Operators Association of India (COAI) condemned the vandalism of mobile towers by agitating farmers.

Why are Farmers Boycotting Reliance?

The attacks on Jio’s telecom towers comes amid speculation that the new farm laws allegedly benefit Reliance Industries. As we are aware, farmers from Punjab, Haryana, and Uttar Pradesh have been camping at the borders of Delhi for more than a month. They are protesting against three new farm laws that were passed by the Indian Parliament in September. The primary aim of these laws is to allow farmers to sell their produce to any buyer of their choice. Thus, they would be able to bypass middlemen or commission agents at state-controlled markets (mandis). 

Mandis, or marketplaces for selling farm produce, were set up in the 1950s to end the exploitation of farmers. The government would also pay them a Minimum Support Price (MSP) for their agricultural products. Many farmers see the MSP as a vital safety net, and started to become very sceptical of the new laws. One of their biggest fears is that large companies such as Reliance Retail would exploit these laws and drive them out of business. 

The Central Government and PM Modi have repeatedly said that procurement of crops at MSP will continue under the new laws. However, the farmers have stated that they would not stop their protests until these laws are repealed. They have also demanded the government to ensure a legal guarantee of MSP.

Reliance Jio, a subsidiary of Reliance Industries Ltd (RIL), has been facing the heat of the protesters. On December 27, it was reported that over 1.50 lakh Jio sims have been ported to Bharti Airtel and Vodafone Idea at protest sites. Around 500-600 people were getting their Jio sims ported every day. This was primarily seen in states such as Punjab and Haryana, wherein agriculture is the dominant activity. The farmers have also showed their dissent by torching Jio’s banners and advertisements. And then, the protesting farmers started damaging the telecom towers in Punjab.

Jio’s Allegations Against its Rivals

Reliance Jio sent a letter to the Telecom Regulatory Authority of India (TRAI) on December 10. They alleged that two companies had created an impression that Reliance stands to gain from the three new agricultural laws. It asked TRAI to take action against rivals Bharti Airtel and Vodafone Idea, for allegedly running a false propaganda campaign to attract its subscribers. Jio stated that they have been receiving a large number of port-out (cancellation) requests, which was mainly due to false information being spread to the farmers. It is not clear if Reliance had provided substantial evidence to support this extraordinary claim.

Both Bharti Airtel and Vodafone Idea (Vi) completely denied all allegations made against them. “Despite being provoked by some competitors who we know will go to any length to make baseless allegations, adopt bullying tactics and use intimidatory behaviour, we have always conducted our business with character and transparency”, said Bharti Airtel in a statement. Vi also stated that these were baseless allegations that were made to destroy their reputation.

On January 2nd, Bharti Airtel sent a letter to the Department of Telecommunications (DoT). The letter stated that ‘Jio’s allegations against the firm did not demonstrate any evidence that it had any hand in the ongoing issues that the company is facing.’ Bharti Airtel also said that the complaint should be dismissed “with the contempt that it deserves”. The telecom company also urged the DoT to introduce a policy to mandate ICR (Intra-Circle Roaming) in such situations of vandalism and network outages.

RIL Files Petition in Punjab & Haryana HC

On January 4, Reliance Industries Ltd (RIL) filed a petition in the Punjab and Haryana High Court “to bring a complete stop to the illegal acts of vandalism by miscreants”. The petition stated that “vested interests” were engaging in spreading false rumours against the group. RIL ensured that they had nothing whatsoever to do with the three farm laws, and in no way benefited from them.

In the petition, RIL stated that it is committed to empowering and supporting farmers. It highlighted that the Reliance Group never bought agricultural land for corporate farming and has no plans to do so either. RIL further claimed that it does not purchase food grains directly from farmers. In fact, its suppliers buy agricultural produce only at the Minimum Support Price (MSP) level. RIL urged the High Court to issue a suitable order to help protect its employees and property from vandalism.

On January 5, the Punjab and Haryana High Court issued notices to the Punjab Government and the Centre in response to Reliance Jio’s plea. The company’s lawyer, Ashish Chopra, said that the High Court has sought a response from the concerned government officials by February 8.

What Next?

With the destruction of telecom towers, the ongoing protests by farmers have turned out to be violent. Only a few of the damaged towers have been restored so far. Many subscribers or consumers of Reliance Jio are still facing network issues in Punjab. Major telecom companies are blaming each other for inciting such an aggressive act. The destruction of such vital telecom infrastructure needs to be stopped at all costs. Will the protests lead to Jio losing more subscribers? Will the farmers boycott more products of Reliance Industries? Or, will the concerned authorities find the people who damaged the towers and take strict action against them? We will have to wait and watch.

Categories
Trending

Vodafone Idea increases Postpaid Tariffs

Vi has increased their prices of Rs 598 and Rs 749 postpaid plans. The third largest telecom company in India has increased their prices of two postpaid plans by Rs 50. Considering their financial condition it is necessary for them to increase their Average Revenue Per User (ARPU). The ARPU of Vi is Rs 119 which is very low when compared with ARPU of Airtel and Jio, Rs 162 and Rs 140 respectively.

Vi is also trying hard to increase the users of their network but unfortunately they are losing more and more users as per the report by the Telecom regulatory Authority of India (TRAI). This might be the reason why the share price of Airtel is going up. There could also be a similar move from Bharti Airtel, they are also in need of funds to pay off their obligations.

The Q2 results of Vi has reduced its loss to Rs 7,203 crore from Rs 25,467 crore. The company is reeling from trying to pay off AGR dues. They are trying to get funds to expand and develop their network services and also to pay off their huge debt. The company had also announced that they would not be bidding in the upcoming 5G spectrum auction. There are also reports that claim Vi has become the fastest 4G telecom provider in India.

Categories
Market News Top 10 News

Tata Consumer’s Net Profit Rises 31% YoY – Top Indian Market News

Tata Consumer Q2 Results: Net Profit rises 31% YoY to Rs 273 crore

Tata Consumer Products Ltd reported a 31.4% year-on-year (YoY) increase in net profit to Rs 273.18 crore, for the quarter ended September (Q2). The company’s revenue increased by 18.5% YoY to Rs 2,781.34 crore, during the same period. The FMCG firm has stated that its sales have rebounded to pre-Covid levels.

Voltas Q2 Results: Net Profit falls 26% YoY to Rs 80 crore

Voltas Limited reported a 25.75% year-on-year (YoY) decline in consolidated net profit to Rs 79.66 crore, for the quarter ended September (Q2). The total income of the company increased by 10.45% YoY to Rs 1,650.80 crore, during the same period. Voltas has stated that it has continued to be the market leader in the room air conditioner space, with a market share of 26.8%.

Read more here.

Supreme Court orders Airtel, Vodafone to provide details of special offers to TRAI

The Supreme Court has backed the Telecom Regulatory Authority of India’s (TRAI) request to seek details from Bharti Airtel Ltd and Vodafone Idea Ltd. The telecom companies will have to disclose all details regarding their segmented tariff or special offers for certain customers. As per the ruling, the disclosed information has to be kept confidential by TRAI.

Read more here.

Bank of India Q2 Results: Net Profit up by 98% YoY to Rs 526 crore

Bank of India Ltd reported a 98% year-on-year (YoY) increase in standalone net profit at Rs 526 crore, for the quarter ended September (Q2). The bank’s net interest income (NII) increased by 6.55% YoY to Rs 4,113 crore, during the same period. The share price of the bank saw a rise of 2.89%, and closed at Rs 41 on the NSE today.

Read more here

APL Apollo Tubes signs pact with Zamil Steel Buildings India

APL Apollo Tubes Ltd. has signed a pact with Zamil Steel Buildings India to develop a market for pre-engineered steel buildings made from structural steel tubes. Zamil Steel India is a subsidiary of Saudi Arabia-based Zamil Industrial Investment Company. Apollo Tubes has stated that this agreement is in line with its broader strategy to create demand for structural steel tubes in India.

Read more here.

Manappuram Finance Q2 Results: Net Profit declines 6.4% YoY to Rs 405 crore

Manappuram Finance Ltd. reported a 6.4% year-on-year (YoY) decline in net profit to Rs 405.44 crore, for the quarter ended September (Q2). The total income of the company increased to Rs 1,577.91 crore, during the same period. The company has also declared an interim dividend of 60 paise per share of the face value of Rs 2.

Read more here.

Coal India to consider interim dividend on November 11

Coal India Limited (CIL) has stated that it will conduct a board meeting on 11th November to consider quarterly earnings, and also consider payment of interim dividend. The company has fixed 20th November as the record date for the purpose of payment of dividend, if it is declared. Earlier, the company had also announced that its e-auction sales had nearly tripled in October to 16.8 million tonnes.

Read more here.

Cipla Q2 Results: Net Profit jumps 41% YoY to Rs 665 crore

Cipla Limited reported a 41.8% year-on-year (YoY) increase in consolidated net profit to Rs 665.43 crore, for the quarter ended September (Q2). The drug maker’s total revenue from operations increased by 14.62% YoY to Rs 5,038.29 crore, during the same period. The Mumbai-based company has stated that its business in India grew by 17% YoY in Q2.

Read more here.

Vedanta Q2 Results: Net Profit falls 62% YoY to Rs 824 crore

Vedanta Limited reported a 61.8% year-on-year (YoY) decline in consolidated net profit at Rs 824 crore, for the quarter ended September (Q2). The revenue of the company declined by 4% YoY to Rs 20,804 crore, during the same period. Last month, Vedanta had failed to delist its shares from the stock markets.

Read more here.

MRF Q2 Results: Net Profit jumps 79% YoY to Rs 411 crore

MRF Limited reported a 79% year-on-year (YoY) increase in consolidated profit to Rs 410.92 crore, for the quarter ended September (Q2). The consolidated revenue from operations stood at Rs 4,244.43 crore, during the same period. The tyre major has stated that its top-line sales have grown above pre-Covid levels.

Read more here.

Dr. Lal PathLabs Q2 Results: Net Profit rises 7.5% YoY to Rs 87 crore

Dr. Lal PathLabs Limited reported a 7.5% year-on-year (YoY) increase in net profit to Rs 87.1 crore, for the quarter ended September (Q2). The company’s revenue from operations increased by 18% YoY to Rs 431.9 crore, during the same period. The diagnostic services provider has announced an interim dividend of Rs 6 per share.

Read more here.

IOL Chemicals Q2 Results: Net Profit rises 45% YoY to Rs 126 crore

IOL Chemicals & Pharmaceuticals Ltd reported a 45% year-on-year (YoY) increase in standalone net profit to Rs 126.96 crore, for the quarter ended September (Q2). The company’s sales increased by 18.83% YoY to Rs 533.48 crore, during the same period. IOL Chemicals has announced an interim dividend of Rs 4 per share. 

Read more here.

Categories
Editorial

The entire Telecom AGR saga

What is AGR- Adjusted Gross Revenue?

Whenever a company makes money, they are liable to pay tax to the government. Telecom companies charge Interconnect Usage Charge (IUC) but it is not a part of the income which stays with them. They have to pass it to different operators. Thus, this charge only inflates their total revenue. It won’t be fair if the government taxes a telecom company on this inflated number. Hence, the total gross revenue is adjusted downwards which is known as Adjusted Gross Revenue.

Where it All Began

After 1994, telecom companies were allowed to operate in a fixed license system which was very expensive. From 1999, the government allowed the telcos to migrate from the expensive license-based model to the revenue-sharing model. This model helped the company to share a part of what they earned rather than paying out a high fixed amount. The payment under the new model was divided into two parts annual license fee (LF) and spectrum usage charges (SUC). The former would be 8% of AGR and the latter would be 3%-5% of AGR.


This AGR was the base of the argument which started in 2005 when the Cellular Operators Association of India (COAI) challenged the definition of AGR calculation that was followed by the government. This leads us to dive deep into the definition given by both the parties and the dispute which continued for a decade and a half.

The “AGR Definition” Dispute

The telecom companies believe that the government should be charging tax from the revenue generated only from the core business and not from other businesses. For example, a telecom company like Airtel will generate revenue not only by providing services in the telecom area but also by selling off its assets or by investing in equities or bonds.

Now, the DoT says that AGR includes the revenue generated by the company as a whole and not only from its core business. They believe that companies are earning revenue only because they are allowed to do business in the country. Hence, they are liable to pay taxes on their total AGR, no matter if it is coming from the company’s core business or the non-core business. 

We bring you a timeline of things that have shaped this whole saga –

October 24, 2019

The judgment day. After 14 years of indecision and uncertainty, the Supreme Court of India announced their mammoth verdict. The SC decided to widen the definition of AGR and include revenues coming for non-core items for taxation. The bombshell was that the apex court has asked the companies to pay all their dues amassing Rs 1.19 lakh crore by 23rd January 2020.

January 23, 2020

Vodafone Idea, Bharti Airtel and others miss the deadline citing poor financial health of their companies. The government also asked DoT not to take any action against the defaulting on payments.

February 14, 2020

As expected, the red-hot SC blasted the Centre, DoT and the telecom companies for not respecting their orders. The apex court declared March 17 as the new deadline for the companies to clear all their AGR dues. 

March 18, 2020

In the past few weeks, telecom companies started clearing their dues but only partially. Supreme Court was asked to give 20 years for companies to clear their AGR dues. The apex court fiercely rejected the idea and also declared that companies won’t be allowed to self-assess their dues. 

June 18, 2020

Supreme Court cooled its stance a tad bit. They asked the companies to present a detailed plan of action as to how they intend to clear their dues. This plan of action should consist of the years that the companies would be asking for and the guarantees they will be giving in the meantime. No allowance for staggered payment would be issued if companies fail to provide adequate bank guarantees and a proper roadmap for payment in upcoming years. 

July 20, 2020

The Supreme Court reserved its orders for the AGR payment timeline. They reiterated that the calculation done by DoT is final and binding. Vodafone accepted the dues levied on them but requested 15 years to pay back the dues. Their counsel stated that the company is in “deep waters”. They even asked the government to retain the Rs 8,000 crore worth of GST refunds for this year.

With all this, the Supreme Court voiced their concern on how they can “rely” on a company to pay their dues in future if they already are in shambles. The next hearing is scheduled on 10th August 2020.

AGR Dues for Vodafone Idea: 

Dues Outstanding: Rs 58,254 crore

Dues Paid: Rs 7,854 crores 

Balance Due: 50,400 crore

Vodafone’s counsel told the Supreme Court that the company is “barely afloat”. If the apex body forces the company for an upfront payment, they will be forced to shut down their operations in India which will directly impact over 1100 employees.

AGR Dues for Bharti Airtel:

Dues Outstanding: Rs 43,980 crore

Dues Paid: Rs 18,004 crore 

Balance Due: Rs 25,976 crore

Airtel has paid 60% of the total dues paid by the telecom companies till now. Several analysts believe that Airtel is in a much better financial condition when compared to Vodafone and will be able to pay its dues soon. Doubts remain on the survival of Vodafone Idea.