India threatens to call in RCom cover - Mobile World Live

India threatens to call in RCom cover

15 MAR 2019

The Department of Telecommunications (DoT) threatened to recover Reliance Communications’ (RCom) outstanding spectrum dues by collecting part of the bank guarantee it holds, The Economic Times (ET) reported.

RCom, which stopped offering mobile services in late 2017 due to financial difficulties, had until 13 March to pay spectrum charges of INR210 million ($3.02 million).

Failure to pay could lead to the withdrawal of the spectrum it holds in the 800MHz band in Mumbai, which is currently used by Reliance Jio under a spectrum sharing agreement, the newspaper said.

The DoT asked the related department to send a show-cause notice to RCom, which has 20 days to respond, a DoT source told ET.

DoT holds bank guarantees of INR20 billion from RCom.

RCom also is due to pay the government INR2.81 billion in April in spectrum charges for airwaves in the 800MHz band acquired from Sistema Shyam Teleservices in eight service areas, ET reported.

The prospect of having the spectrum withdrawn and losing revenue from Jio adds to RCom’s already significant financial troubles.

Last month the Supreme Court of India found Anil Ambani, RCom chairman, guilty of contempt of court and wilfully failing to pay INR5.5 billion to Ericsson in service charges. He could face a three-month jail term if he fails to pay within four weeks.

Ericsson took legal action against the operator in 2018 over unpaid service charges, with the row deepening in recent months as RCom continued to miss payment deadlines.

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Joseph Waring

Joseph Waring joins Mobile World Live as the Asia editor for its new Asia channel. Before joining the GSMA, Joseph was group editor for Telecom Asia for more than ten years. In addition to writing features, news and blogs, he...

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