Tatas Pay Government For Tele Business Merger With Airtel

Tatas have paid Rs 3,100 crore to the telecom department towards spectrum payment liabilities in line with their deal to sell ailing telecom business to Bharti Airtel.

Airtel and the loss-making Tata Teleservices (TTSL) had announced their deal in September 2017, as part of which the former took over the consumer mobility business of the Tatas in 19 telecom circles. “The payment of Rs 3,100 crore was received recently, and this covers most of the liabilities towards the spectrum payments of TTSL,” a source said.

The deal, which allowed Tatas to exit the difficult telecom business, will bring in an additional 178.5MHz of spectrum for Airtel in three bands that are widely used for 4G. This will help Airtel tackle competition from Reliance Jio more effectively.

Apart from this, it will also add about 1.8 crore of Tata Tele’s mobile subscribers to Airtel’s 28.4 crore users, according to regulatory data at the end of January.

Apart from this, the DoT has demanded bank guarantees of around Rs 7,500 crore towards one-time spectrum charge (OTSC) liability.

However, it is expected that this will be challenged in Telecom Disputes Settlement and Appellate Tribunal (TDSAT) by Airtel, similar to a precedent it had done in the case of merger of Telenor.

The deal between the two companies has so far received conditional approval from the telecom department.―Times of India