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Telecom Department To Soon Settle Issues On Merger, Transfer Of Licences

For the Vodafone-Idea merger, Vodafone India and Idea Cellular paid the department a sum of Rs 7,268 crore in July 2018.

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Telecom Department To Soon Settle Issues On Merger, Transfer Of Licences

In the last two years, there has been consolidation in the telecom industry, the department said


New Delhi: 

The Department of Telecommunications will settle all issues related to merger and transfer of licences in the sector on a priority basis, an internal note of the ministry said.

"In the last two years there has been consolidation in the telecom industry involving Vodafone-Idea, Bharti Airtel-Telenor, Bharti Airtel -Bharti Digital Networks Pvt Ltd, Bharti Airtel-Tata Teleservices and Bharti Airtel-Airtel Broadband services. All issues related to the merger/transfer of licences to be settled," said a note by the Department of Telecommunications on mergers and acquisitions (M&A), indicating these top its agenda over the next few months.

The note did not give further details as the roadmap on settling such issue would be worked out shortly. But the settlement is not likely to touch on the spectrum dues part which is already with the telecom tribunals. But all other glitches, which need to be ironed out at the department's end, will be looked at, sources said.

Out of all the listed M&As, the Vodafone-Idea, Airtel-Telenor and Airtel-Tata Teleservices combines have seen skirmishes between the department and the operators over the spectrum dues of previous licensee period prior to the merger. In the other three cases -- Airtel- Telenor, Airtel-Tata Teleservices and Vodafone-Idea, the matter has landed at the tribunal, TDSAT.

Recently, TDSAT partially stayed the Rs 8,300-crore demand by DoT from Airtel for the Tata Tele merger and directed "the authorities concerned to take the merger of two companies and licence on record", subject to stay on one-time spectrum charges (OTSC) demand of around Rs 7,000 crore.

The department had earlier asked Airtel to submit a bank guarantee of around Rs 7,000 crore and immediate payment of Rs 1,287.97 crore before it takes merger of Airtel and Tata consumer mobile business (CMB) on record.

For the Vodafone-Idea merger, Vodafone India and Idea Cellular paid the department a sum of Rs 7,268 crore in July 2018 that was sought as a key condition for approval. Out of this, Rs 3,926.34 crore was paid to the telecom department in cash and a bank guarantee of Rs 3,322.44 crore was also furnished, according to Idea Cellular.

In October 2018, the telecom company moved the telecom tribunal to recover bank guarantees worth Rs 3,322.44 crore that was paid "under protest" to get the government's nod for the merger.

For Airtel-Telenor merger, the approval came within a week of Supreme Court order that quashed the DoT petition seeking security deposit of around Rs 1,700 crore and directed it to clear the merger. The guarantee included Rs 1,499 crore for one-time spectrum charge for the radiowaves allocated to Airtel without auction, and over Rs 200 crore for spectrum payment which Telenor has to make.

While Telenor Airtel and Vodafone Idea mergers have happened, the Airtel-TTSL merger is pending.



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