Reliance Jio, Airtel and Other Companies Show Interest in Buying Assets and Spectrum from RCom

Many parties include private equity investors, asset management firms and telcos alike have shown interest in the sale of RCom assets and spectrum

Highlights
  • Vodafone Idea has not shown interest in the sale of spectrum
  • There are likely to be legal troubles between DoT and the bankrupt telcos

As the bankrupt telecom operator, Reliance Communications, seeks to sell its assets, it has found many takers for its sale, and it includes some of the big names like Bharti Airtel and Reliance Jio Infocomm. As per a new ET report, the people aware of the matter said that Reliance Jio Infocomm, Bharti Airtel, asset management firms and telecom tower operators have sent Expression of Interest (EoIs) thus showing interest in the acquisition of assets of Reliance Communications. Although the list of companies showing interest in the asset sale is long, it does not include Vodafone Idea, which is currently having the worst financial troubles in the industry.

Private Equity Firms Also Join the Line  

As per the person aware of the matter, “Around 10-12 firms have sent in their expressions of interest. Bharti Airtel and Jio are part of it.” The person also added that legal battle in this ongoing process would be a key concern. When posed with questions, Bharti Airtel, Reliance Jio and Vodafone Idea did not return any comments. Same was the case with Deloitte which has been given the responsibility of carrying out the court-monitored bankruptcy proceeding of Reliance Communications.

Among the assets that have been put up for sale are airwaves in 14 of India’s 22 telecom circles, about 43,000 telecom towers under the name of Reliance Infratel and some fibre and real estate assets. Also, RCom’s licenses over the 800 MHz spectrum are slated to expire on July 2021. Speaking of the debt, which the Anil Ambani led telecom operator holds, the telco has been confirmed to be in neck-deep debt of about Rs 46,000 crore. As many as 39 financial creditors have claimed Rs 49,193 crore from the insolvent telco. In addition to financial lenders, RCom and its subsidiaries also have numerous operational creditors as well.

Reliance Jio’s Deal with RCom Falls Apart 

To recall, a few weeks back, Reliance Jio had almost bought the assets of Reliance Communications, but the deal went bust when the Department of Telecommunication (DoT) brought up an issue of who would take the liability of payments of spectrum after the deal was made. This led to Reliance Jio retracting from the acquisition of the spectrum, and the deal fell apart forcing Reliance Communications to move ahead to insolvency.

The high interest in the spectrum and assets shows that for telcos like Bharti Airtel and Reliance Jio, these assets will be useful in their plans for rapid 4G expansion and 5G launch. The private equity firms are also heavily interested in the sale, meaning that the competition between the companies can get fierce. However, the equity firms will likely lean more towards the assets rather than spectrum.

Legal Troubles Between DoT and Bankrupt Telcos  

The big hurdle in the sale of these assets and especially the spectrum from the insolvent telcos will be the legal troubles between the bankrupt operators and the Department of Telecommunications (DoT). As per the DoT, while the telcos are free to trade spectrum, it is, in the end, the property of government which is leased. As such, it should be returned to the government unless payments and all arrears are made. These arrears would include spectrum usage charges and one-time spectrum fee. Even then, the telecom operators are ready to buy the spectrum since it would come at a much cheaper cost as compared to auctions held by the government.

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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ChetanRiosakettri_visEsmail Recent comment authors
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tri_vis
tri_vis

OT :
Request to admin and author.
Please increase the size of fonts in comments section of articles , as it’s causing more strain on eyes when browsed on mobile phones. And I think most traffic nowadays comes from mobile browser on the TT website

( One can increase size of fonts from mobile settings but it will reflect on entire screens of mobile). Which is not required

So please so needful.

tri_vis
tri_vis

Thanks a lot admin and author.

Thamilan daa
Thamilan daa

I am getting reliance 4G signal in Tamilnadu even now.

Gurru S
Gurru S

All will get

Anilwa
Anilwa

check again if its Kangal Bhai Signal or Mota bhai signal.

Esmail

@Anilwa Technically speaking Rcom has only shut down 2G and 3G services Pan India, they still have 4G services running on their liberalised band 5 spectrum which will stay active till 2021 till the spectrum license expires in most circles. If you check TRAI’s subscription data report, Rcom has actually added 476 New wireless subscribers in May 2019. Even today Jio has an active spectrum sharing deal with Rcom for band 5 spectrum. I am able to see Rcom 4G in network scan in Mumbai even today.

saket
saket

So rcom just kept few subsciber alive so that spectrum sharing deal will generate some revenue and license wont be cancelled.

then why rcom didnt pay dues in time in last 1 year. which was point of debate and thne DOT encash Bank gaurantee.

So some /basicaly rcom staff must be given free Rcom 4G dongle/wifi hotspot to be running on jio 4g network. this is trick of anil bhai.

Rio
Rio

@Esmail .. So why dont they just switch off the tower when they aren’t providing service at all?

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