DoT Urges Aircel to Return Spectrum Against Unpaid Arrears

The Department of Telecommunications (DoT) has asked the bankrupt telecom operator, Aircel, to return its spectrum to the government as it has not yet paid its arrears for the same, reported an ET Telecom report. This non-payment of the arrears has created a significant roadblock for the operator’s bankruptcy process and is starting to hurt the lenders of Aircel. On Monday, the department informed the bankruptcy court that Aircel didn’t hold the spectrum in the form of an asset. To this, Aircel responded by saying that it wasn’t the case as without the spectrum the entire bankruptcy proceeding would be futile.

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Aircel Likely to Suffer Dent if DoT Gets Spectrum

If the government’s stand is taken into consideration, then it could mean trouble not only for Aircel but also for another telecom operator undergoing insolvency proceedings – Reliance Communications. The telcos consider the spectrum as their most valuable asset, but if they are said to be not the holders of these spectrum,then they might become a little less attractive for the buyers.

DoT’s legal counsel-additional solicitor general Anil Singh said the following to a National Company Law Tribunal (NCLT) bench headed by Justice MK Shrawat, “Spectrum is not an asset of any company. It is only granted for permissive usage and not an asset to be occupied. Today, we have large sums to be recovered, and they continue to use our services without any payments.” He further added, “They (telcos) are getting all the benefits while the dues are getting added. The licences are controlled by us and you do not own or purchase spectrum.”

The government has kept an aggressive stance against the sale of the spectrum by the insolvent telcos during the bankruptcy proceedings. Aircel currently holds spectrum in the 900 MHz and the 1,800 MHz band and had filed for insolvency in March 2018, after it wasn’t able to service a debt of Rs 20,000 crores.