Reliance Communications Spectrum Auction Plan Hits a Snag After DoT Delivers a Blow

Reliance Communications (RCom) has hit a new hurdle in its insolvency process, falling into the hands of uncertainty about whether or not the resolution professional will be able to sell its most valuable asset – spectrum, as per a new ET Telecom report. According to the insolvency professionals, the telecom operators may refrain from buying spectrum from Reliance Communications to avoid a clash with the Department of Telecommunications (DoT) and might instead go for buying spectrum from the upcoming auctions. This might be because of the spectrum-related dues which would accompany the buying of spectrum in case telcos decide to buy from Reliance Communications.

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Telcos Might Refrain from Buying Spectrum from Reliance Jio

According to one person, “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,” he further added, “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.” It is worth noting that Reliance Communications’ wireless assets include 4G airwaves across four bands. Besides the spectrum, Reliance Communications also currently holds 43,000 telecom towers under the tower firm Reliance Infratel which would also be put up for auction to rake in cash flow to recover some of the debt.

The Department of Telecommunications (DoT) had remarked to the National Company Law Tribunal in the Aircel insolvency proceeding that spectrum is something that is leased to the telecom operators for 20 years and it should be returned by the insolvent telcos like Reliance Jio and the Maxis-owned telecom firm for failing to pay the dues. The department added that eventually the spectrum is the government’s property and it should be returned likewise.