RCom and Jio Spectrum Trading Deal in Jeopardy as DoT Refuses to Accept Land Parcel as Security

Reliance Communications (RCom) has remarked that its deal of spectrum trade with Reliance Jio Infocomm will land in jeopardy if the Department of Telecommunications (DoT) does not accept a land parcel instead of bank guarantees as security. DoT, however, is adamant on only receiving bank guarantees worth of Rs 3,000 crore from the telco and has also stated that Reliance Jio can furnish these guarantees on behalf of RCom. This struggle between RCom and the department in ensuing because RCom wants its spectrum trading pact cleared from the DoT.

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DoT Asks Jio to Furnish Guarantees Instead of RCom

As per a report by ET Telecom, a person aware of the matter said, “RCom told the apex court that if DoT does not give a NOC (no-objection certificate) to the spectrum trading deal with Jio, then the deal will fall through. The operator argued that DoT should accept the land parcel as a guarantee as per an earlier order, but DoT refused.”

To recall, after facing brutal competition by the entry of Reliance Jio into the industry, Reliance Communications was financially troubled by widening losses when it decided to shut its operations. However, the telco owes a massive Rs 46,000 crore debt to its vendors like Ericsson. Now the Anil Ambani led company depends on the Reliance Jio Infocomm deal, which would help the telco pare its massive debt.

As per the sources, now the Supreme Court has set December 15 as the next deadline for RCom’s payment to Ericsson. While Kapil Sibal assisted by an advocate, Mahesh Agrawal spoke for RCom’s stance, PS. Narasimha represented DoT. Keeping forth DoT’s position, the representative said that since RCom is refusing from furnishing bank guarantees, then Reliance Jio can do the same on RCom’s behalf.