TSDAT orders telecom dept to clear Airtel-Telenor deal and bank guarantees

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KOLKATA: The Telecom Disputes Settlement Appellate Tribunal (TDSAT) has ordered the Department of Telecommunications (DoT) to approve Bharti Airtel’s acquisition of Telenor India without insisting on any bank guarantees.

Earlier this month, DoT had asked Bharti Airtel to submit a near Rs 1,700 crore bank guarantee before clearing its merger with Telenor India. The BG included a Rs 1,499 crore component for one-time spectrum charges (OTSC) for airwaves allocated to the Sunil Mittal-led telco without auction, and over Rs 200 crore for spectrum payments, which Telenor needs to make.

Bharti Airtel had challenged DoT’s bank guarantee demand by moving the Telecom Disputes Settlement Appellate Tribunal (TDSAT) on Wednesday.

A Bharti group spokesperson confirmed that the telecom tribunal had ordered DoT to grant approval to Airtel’s planned acquisition of Telenor India without any bank guarantee.

“Regarding the demand for bank guarantee, on Airtel’s petition, TDSAT has directed DoT to take the merger (with Telenor India) on record without the need to furnish a bank guarantee. We hope to get final DoT approval soon,” a Bharti spokesperson said Thursday.

Under present telecom MA rules, DoT can insist on bank guarantees (BGs) from telcos for their OTSC dues in the run-up to any mergers even if the matter is in court.

The OTSC dues are based on DoT rules that require a telco holding beyond 6.2 MHz/circle between July 2008 and December 31, 2012, to pay a one-time market price for excess spectrum held. Likewise, it requires telcos to pay the market price for spectrum holdings beyond 4.4 MHz/circle between January 2013 till the expiry of their respective licences.

The DoT has also sought an undertaking from Bharti Airtel that it would be liable to pay for any pending dues with respect to merger of the two companies and all demands which may be raised by any wing of the department for Telenor India.

“A letter of compliance has already been submitted to DoT on all the mentioned points,” the Bharti spokesperson added.

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