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Airtel, Tata Teleservices Yet To Get Govt, Nod For Merger

Airtel and Tata Teleservices have failed to receive a nod from the government for their much-awaited merger. Clearance will now spill over into the next year, as the companies will have to clear AGR dues — as mandated by the Supreme Court — before joining hands.

Sources said the companies are now working overtime to do self-assessment of their AGR dues, as demanded by the department of telecom (DoT), while also planning to petition the government to approve the merger as early as possible. “The merger was originally slated to be completed by July this year. However, due to procedural aspects with DoT earlier and now due to AGR dues mandated by the top court, we have failed to complete the process,” a senior functionary in one of the companies told TOI.

With DoT guidelines stipulating clearance of all dues before getting into any merger, the companies will now have to clear AGR dues. While dues for Airtel stand at nearly Rs 35,000 crore, Tata Tele needs to pay around Rs 13,000 crore. The telecom companies have sought a reassessment of the Supreme Court order in a review petition. While doing so, they are also separately preparing their self-assessment on dues that need to be raised against them. “We plan to petition DoT to de-link the issue of AGR payment and taking of merger on record,” another source said.

The source also said Tata Tele will be paying AGR dues to enable the merger to go through. “However, Airtel is in a tight financial position and till the time the company clears its own dues, the merger will not be allowed to be completed,” the source said.

Tata Tele and Airtel had agreed to merge their telecom business in October 2017, after the former decided to exit the sector due to recurring losses and poor performance. As part of the merger, Airtel had absorbed Tata Teleservices’ consumer mobile business operations in 19 telecom circles — 17 under TTSL and two under Tata Teleservices (Maharashtra). It also agreed to take over a small portion of the unpaid spectrum liability of Tata Teleservices. The merger will bolster Airtel’s radio waves pool with additional 178.5MHz spectrum in 1800, 2100 and 850MHz bands — widely used for 4G.―Times of India

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