DoT Rejects Reliance Jio and RCom Spectrum Trading Deal

In a new shocking turn of events, the Department of Telecommunications (DoT) has informed Reliance Communications and Reliance Jio Infocomm that it would not be able to clear their spectrum trading deal. This move is a new blow to the Anil Ambani led telecom operator, which stands under massive debt and has to repay its lenders at the shortest. As per an ET Telecom report, Reliance Jio earlier sent a letter to the department seeking assurance from the telecom department that Jio would not be held liable for RCom’s past dues on the spectrum. However, the government made it clear that it is against the spectrum trading norms, which outline that the buyer is liable for the dues which the spectrum seller has not cleared yet.

rcom-jio-spectrum-deal-dot

Jio Wanting to Do Away with Responsibility of Spectrum Dues

A senior DoT official said about the matter, “The trading rules clearly say DoT can ask both the operators or any one of them to pay the dues. Since Jio has imposed conditions, we cannot accept it (the deal) as it goes against the guidelines.” The official further added, “Now the ball is in their court. They have to decide and come back to us. Till then, this deal is off the table.”

The biggest blow out of this new decision is definitely delivered to Reliance Communications which was basing off its repayment to the Swedish manufacturer Ericsson amounting to Rs 550 crore out of this deal. The telecom operator has already missed the Supreme Court mandated deadline of December 15 for repayment to Ericsson and the recent denial of the agreement by the department only means that the telco will delay its repayment further. Previously, Ericsson had filed a contempt of court plea against the Reliance Communications Chairman, Anil Ambani, who had stood guarantee for repayment. Now Reliance Communications might be dragged in for insolvency proceedings along with an expected revision of the contempt of court plea.

RCom Likely to Further Delay Ericsson Payments

Earlier in the matter, Supreme Court had directed the Department of Telecommunications to clear the spectrum trading deal with the security of Rs 1,400 worth of corporate guarantees from Reliance Realty. The guarantees were submitted to the department to cover the spectrum user charge (SUC) of Rs 2,947 crore. The telecom department was of the opinion that in case there are any inconsistencies with the land parcel which Reliance Communications is providing as security, then Reliance Jio should step in to make the payments. However, with the recent letter to DoT, Reliance Jio has shed off any such responsibility.

To recall, the first time when the spectrum trading deal between Reliance Jio and Reliance Communications got stuck was in late 2017. The issues arose because the Department of Telecommunications demanded dues worth Rs 2,947.68 crores as a pre-condition for approving the deal. After a lot of legal struggle, the Supreme Court directed the department to accept a Rs 1,400 crore corporate guarantee as security against the pending spectrum dues. The spectrum trading deal between Reliance Jio and Reliance Communication will help the Anil Ambani led telco to pare its Rs 46,000 crore debt by Rs 18,000 crore.

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Arpit spends his day closely following the telecom and tech industry. A music connoisseur and a night owl, he also takes a deep interest in the Indian technology start-up scene and spends rest of his time spilling poetry and stories on paper.

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Kaushik IMANikhil Mumbai-PuneThamilan daaMotilal BerraSC-KPA (Kolkata circle) Recent comment authors
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SC-KPA (Kolkata circle)
SC-KPA (Kolkata circle)

From Jan 2019, Jio coverage in rail routes and rail compounds also start improving as Jio is the CUG partner of Indian rail and from my friends in railway, came to know that spot inspections already completed and they are going to deploy cell sites as fast as possible.

Thamilan daa
Thamilan daa

Esmail and genuine responders :

> What is the difference between VoLTE to VoLTE calls?. How does it differ from normal voice calls made from 3G network to another user on 3G network?.

> What is the case of VoLTE to 2G or landline calls and vice versa?

> What is the case of voice calls made from a 3G network to a user on 2G network or landline and vice versa?.

Kaushik IMA
Kaushik IMA

VOLTE to Volte enables use of higher bitrate audio codec which increases voice quality. Same codec is supported pan India on 3G in Vodafone (3G to 3G calls) and Airtel/Idea (select circles only). Now 2G does not use this advanced codec except in special cases like Vodafone in select circles. As such, the advanced codec is only guaranteed to work if the receiver of the call is also on the same operator as you and on 3G/4G network. I. E. 4G (dialled) to 2G(receiver) call will not be high quality/HD. If calling to receiver on another operator, it may or… Read more »

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