DoT May Go To SC Against Airtel, Tata Tele Merger

The Department of Telecommunications (DoT) is likely to move the Supreme Court next month, against the telecom tribunal’s decision that mandated it to clear the merger deal between Bharti Airtel and Tata Teleservices, a move which could further delay closure of the transaction.

People aware of the thinking at the department said that DoT wants to safeguard its financial interests, given that dues worth over Rs 8,000 crore on account of one-time spectrum charges (OTSC) are yet to be recovered from the companies.

“The appeal is likely to be filed in July, once the courts open,” one of the people said.

Another person said that the DoT has taken similar legal routes in the past as well. In May last year, DoT had moved the apex court against a telecom tribunal decision directing the department to clear Airtel’s buyout of Norwegian telecom company Telenor’s India operations, without furnishing a bank guarantee of Rs 1,499 crore. The court ruled in favour of the companies.

In Tata Tele’s case, Telecom Disputes Settlement and Appellate Tribunal (TDSAT) had last month partially stayed DoT’s demand for about Rs 8,300 crore in bank guarantees in one-time spectrum charges (OTSC) on the grounds that similar demands have been stayed in other merger cases in the industry by courts, including the Bombay High Court.

The tribunal had asked DoT to take on record the merger of Bharti Airtel Ltd and Bharti Hexacom Ltd with de-merged undertaking of Tata Teleservices. The tribunal had asked Airtel to submit half of the Rs 1,287.97 crore demand raised by DoT as OTSC for Chennai circle licence extension from November 30, 2014, to September 27, 2021, within four weeks. It also allowed the merging companies to “operationalise the spectrum and undertake other consequential activities”.

While the Sunil Mittal-promoted company submitted Rs 644 crore, as directed by the court, the approval is still awaited for the deal that was announced back in October 2017.

As part of the agreement signed at that time, Airtel will absorb the Tata Group-owned telco’s consumer mobile operations in 19 circles — 17 under Tata Teleservices and two under Tata Teleservices (Maharashtra) Ltd. As part of the proposed agreement, Airtel will also take over a small portion of the unpaid spectrum liability of Tata Teleservices.

The Sunil Mittal-led telco will get an additional 178.5 MHz of spectrum in three bands—1800 MHz, 2100 MHz and 850 MHz—that are widely used for 4G, an area where Airtel is expanding fast to keep pace with Reliance Jio Infocomm.

Airtel will also add about 13 million of Tata Tele’s mobile subscribers as of April 2019 to its nearly 322 million users. But most of Tata Tele’s mobile users are inactive, as per the regulator.―Gadgets Now