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Last Updated : Apr 07, 2017 02:13 PM IST | Source: Moneycontrol.com

RCom retrenches employees, delays payments: Sources

Vendors claim RCom hasn't been paying IUC to some of them for over two months.


The financial stress on telecom players is now coming to the surface at the operational level. Leading telecom services player Reliance Communications has retrenched nearly 800 employees in the last few weeks, including some senior ones, as it battles falling revenues and profits, sources have told Moneycontrol.

The company has also not been making payments to vendors and other telecom companies on time.

Vendors claim that RCom has not been paying interconnect usage charges to some of them for more than two months. Tower companies claim that payments have been patchy and delayed through 2017 and new payment terms have been sought by the company, which would include an interest component if the delay persists.

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The maximum interconnect user charge (IUC) payments outstandings are towards Airtel and Vodafone, it is reliably learnt. Customers have been facing interconnect issues in some key circles for a couple of days, too, for the same reason.

An email query sent to RCom and other operators had evoked no response at the time of publishing.

RCom, which is sitting on a debt of Rs 42,700 crore, reported a net loss of Rs 531 crore in the quarter ended December 2016. Consolidated revenues fell 11 percent to Rs 4822 crore in the December quarter.

Industry sources say that non-payment of IUC dues are a cause of concern as they are largely a pass-through (customers have been billed for it and the company needs to pay a small part of it to other operators where calls have been terminated).

Sources said that if non-payment of dues continue then the operators will be forced to restrict interconnect facility to RCom, which will cause inconvenience to customers.

Some debt-laden operators have been lobbying with the government for relief as cash flows have only tightened over the last few quarters. It may be recalled that RCom shut down its profitable CDMA operations last year, which also impacted its financial performance.

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First Published on Apr 7, 2017 11:07 am
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