MUMBAI: A cloud hangs over the
Reliance Communications (RCom) bankruptcy process, with lack of clarity over whether the resolution professional can sell its most valuable asset — spectrum.
Telcos may choose to steer clear of buying RCom’s airwaves — even if they are put up for sale — to avoid clashes with the telecom department over payment of spectrum-related dues and may prefer to buy spectrum from the upcoming auction, people handling the insolvency case said.
“The residual fibre and all the towers are likely to be sold, but it is unlikely that there will be any takers for the spectrum,” said one person. “No one wants a legal battle with the telecom department and an operator might as well buy spectrum from the upcoming auction, which will have validity for the next 20 years.”
RCom’s wireless assets include 4G airwaves across four bands. Besides, the company’s 43,000 telecom towers housed under Reliance Infratel, would also be auctioned to help lenders recover some of their debt.
The
Department of Telecommunications told the
National Company Law Tribunal in the
Aircel insolvency case that bankrupt telcos such as RCom and the Maxis-owned carrier need to return spectrum to the government for failing to pay dues. The DoT said spectrum is owned by the government and it is only leased to operators for 20 years — resolution professionals can’t sell it.
On Monday, the DoT rejected a resolution proposal by the creditors of Aircel, saying the Rs 16.5 crore earmarked for all operational creditors, including the government, was insufficient to cover its licence and spectrum-related dues. It reiterated its stance that spectrum can’t be sold by the resolution professional.
While telcos can trade in auctioned spectrum, they must first clear payment arrears for the airwaves, including spectrum usage charges and one-time spectrum fee, or submit bank guarantees to cover for them.
RCom’s plan to sell spectrum to Reliance
Jio Infocomm was rejected by the DoT after the buyer refused to be held liable for RCom’s past dues related to the airwaves. RCom’s spectrum had been valued at Rs 7,300 crore for the now-scrapped deal with Jio.