Telecom sector is under stress, banks not lending, says Anil Ambani

Reliance Anil Dhirubhai Ambani Group Chairman, Anil Ambani and Jai Anmol Ambani, ED, Reliance Capital during the Reliance ADA Group AGM in Mumbai | Photo: Kamlesh Pednekar

Reliance Group Chairman Anil Ambani on Tuesday said the telecom sector is under stress and banks are not extending any credit.

"The Reserve Bank of India in April asked all banks to be cautious on telecom. Banks are now not extending any credit," Ambani told the Reliance Communications (RCOM) annual general meeting here.

"The sector has transformed India as per late Dhirubhai Ambani's vision... The sector has brought mobility to a billion people, with only one winner - the customer," he added.

He, however, said there was a sharp erosion in the competitive landscape now and that some overseas operators have left the country.

"Over the last year, operator after the operator has seen value erosion and large losses. I call this creative destruction of a sector, normally passed off as a disruptive factor," Ambani added.

He said the telecom sector needed a minimum of Rs 100,000 crore a year to expand and maintain the quality of service.

"Telecom sector is moving towards a monopoly, oligopoly: Is that what the customers want? As far as RCOM is concerned, we have a transformation programme in place and running."

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel