Reliance Jio Infocomm has urged the country’s telecom department to block Bharti Airtel’s acquisition of Tikona’s 4G business for Rs 1600 crore, taking its fight with the latter to another level. The Mukesh Ambani-led telco has alleged that Airtel is exploiting a gap in M&A rules through this deal, which actually is a spectrum trading deal.
In a letter to the DoT dated May 15, the 4G entrant said that the deal could result in an over Rs217 crore loss to the national exchequer. It added that Airtel had earlier subverted M&A rules using a gap in the rules in its acquisition of Qualcomm’s BWA business.
“This is a prima facie case of revenue loss for the exchequer demanding your urgent attention. The DoT should not approve the proposed Airtel-Tikona transaction till Airtel has paid the differential license fee for migrating the BWA spectrum from ISP (internet service provider) license to UL (Unified License),” Reliance Jio said in the letter.
Jio alleged that Airtel-Tikona deal is structured as an M&A one to circumvent spectrum trading guidelines which only permit trading between access service providers and not from ISP holders.
However, the Sunil Mittal-led telecom operator denied the allegations and said that Jio is trying to block competition through its acts.
Airtel on March 23 inked agreement to acquire Tikona Digital’s 4G business, along with its 4G spectrum, in Gujarat, UP (East), UP (West), Himachal Pradesh and Rajasthan circles for Rs 1,600 crore.
Jio in its letter to the DoT said that Bharti Airtel needs to pay a fee to the government for migrating Tikona’s BWA spectrum from an internet service provider (ISP) license to the Unified License (UL) regime, which allows a company to offer voice services.
Jio said the government should refund Rs 1,658 crore that it had paid in 2013 for a similar migration to UL, in case Airtel doesn’t pay the fee.
Jio, citing the UL guidelines, said, “To migrate from ISP with BWA spectrum to the UL regime with authorisation for providing access services, an additional fee equal to the difference between the entry fee for UASL (unified access service licence) and entry fee paid for ISP licence shall be payable in addition to the entry fee as applicable for new UL.”
Jio also requested an urgent intervention by the telecom department and had asked the department to amend the M&A guidelines to clarify the payment for migration upfront ahead of giving approval to an M&A deal.
Chakri is a go-to guy for your next smartphone recommendation. Back in his engineering days, he used to play with smartphones by installing custom ROMs and that passion got him into the tech industry. He still goes nuts about a smartphone knocking his door for review. Currently managing everything at Telecom Talk, Chakri is trying to master PUBG Mobile in his free time.