SC Passes Order in Favour of RCom, Directs DoT to Approve Spectrum Trade With Reliance Jio

Previously, the long legal battle between RCom and Department of Telecommunications (DoT) was ongoing because DoT was adamant on Reliance Communications providing bank guarantees worth Rs 3,000 crore before giving the green flag for Reliance Jio and RCom sale of spectrum. However, as per the latest update, Supreme Court has given a sigh of relief for the Anil Ambani led telco, as this deal would finally help the telco in paying off its debt of Rs 46,000 crore.

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SC Directs DoT to Approve Spectrum Sale to Jio

This comes as a huge burden off Reliance Communication’s shoulder as the spectrum trading deal with Reliance Jio would help the telecom operator in paying off its debt of Rs 46,000 crore to vendors like Ericsson. However, the stretched out legal tussle between the government meant that Reliance Communications wasn’t in a position to make a move. With the green flag finally in sight, now Reliance Communications will be on the path of paying off its debt.

In October, as an interim order, Telecom Disputes Settlement and Appellate Tribunal (TDSAT) had directed DoT to “expeditiously” allow the carrier to sell spectrum to Jio without the need of bank guarantees from Anil Ambani’s cash strived telco. The tribunal also advised Reliance Communications against selling the land parcel worth Rs 1,400 crore “for the time being” which RCom was keeping aside as replacement for bank guarantees and as security for the spectrum trading deal.

Rs 1,400 crore Corporate Guarantees to Serve as Replacement

However, now Supreme Court has issued a new order directing the DoT to clear the spectrum trading deal of Reliance Communications with Reliance Jio. As part of this new arrangement, Reliance Realty Limited, a subsidiary of Reliance Communications will come ahead with the Rs 1,400 land parcel which will be put forth as security for DoT, thus forming the basis of this deal. The debt-ridden telco will provide corporate guarantees to the Department of Telecommunications (DoT) within two days, following which the department will clear the spectrum trading deal between Reliance Communications and Reliance Jio.

In the legal battle previously, DoT had moved the court to object that it could not accept the land parcel as guarantees. After the appeal was rejected in TDSAT, the department moved Apex Court to challenge the decision. Now Reliance Communications has been given the time till December 15 to pay off its dues to Ericsson and HSBC Daisy Investments.

The clock has been ticking for Reliance Communications for paying off its debt. However, because of the ongoing legal battles with the department, RCom wasn’t able to deliver according to its payment commitments. After this signal from the SC, RCom will be paying off its debt to Ericsson from the Rs 975 crore which it will get from Reliance Jio’s minority shareholders as part of this new deal. The debt-ridden telco is also in talks with the Canadian asset management firm, Brookfield to sell off its real estate to further ease off its debt.

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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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Kirit PatelNikhil Mumbai-PuneKaushik IMAVishal | ChennaiVipin (Mumbai) Recent comment authors
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Vishal | Chennai
Vishal | Chennai

Jio is getting band 8,1 in some circles from RCOM . For that to be deployed they need to perform antenna upgradation or add new antennas in their Jio sites.

Jio is saying about digitisation but don’t know why they didn’t deployed single RAN radio antennas in the beginning itself.

If they decide to go with band 1,8,41 in future they need to work hard to modify existing Jio sites to support other band frequencies as well

Nikhil Mumbai-Pune
Nikhil Mumbai-Pune

Only in two circles for band 8. Band 1 is mostly in 5Mhz quantity. Idea with 5Mhz band 1 spectrum is pathetic. It needs to be 10Mhz in band 1/3/5 to work properly. Also thet do not have single RAN solution so it’s problematic to deploy them soon. I hope they trade this with Vodafone-Idea to achieve better in auctions. Jio needs 30-40Mhz in band 40. I think Jio will get everything of that. Will leave everything except 10-10Mhz in band 3-5.

Vishal | Chennai
Vishal | Chennai

Jio is getting band 8,1 in some circles from RCOM . For that to be deployed they need to perform antenna upgradation or add new antennas in their Jio sites.

Jio is saying about digitisation but don’t know why they didn’t deployed single RAN radio antennas in the beginning itself.

If they decide to go with band 1,8,41 in future they need to work hard to modify existing Jio sites to support other band frequencies as well

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