Reliance Communications (RCom) hit out at India’s Department of Telecommunications (DoT) for creating hurdles that delayed its deal to sell assets to Reliance Jio, which has had the knock-on effect of prolonging a legal dispute with Ericsson.
In a stock exchange notice, RCom responded to claims first made by The Economic Times newspaper, which reported Ericsson had filed a lawsuit with India’s Supreme Court against the operator after it missed a deadline to pay INR5.5 billion ($75.1 million) to the vendor as part of legal settlement
RCom said Ericsson’s filing was “unwarranted”, stating it was forced to apply for a 60-day extension to the payment deadline because it had planned to pay the fee from the proceeds of its deal with Jio. However, the operator said the sale cannot yet be completed “owing to factors beyond” its control.
Specifically, the deal is being held up by a long-running dispute over a DoT demand covering spectrum use fees. The “DoT unjustly sought securitisation of alleged demands (which are wholly disputed) for spectrum usage charges amounting to INR2.9 billion,” RCom noted, adding: “This demand of DoT has been challenged by RCom before the Honourable Telecom Disputes Settlement and Appellate Tribunal.”
RCom agreed to sell its fixed and wireless assets to Jio in January for INR250 billion, but was prevented from completing the sale by India’s Supreme Court due to its legal dispute with Ericsson relating to non-payment of service charges.
The companies settled the dispute in August, which appeared to clear the path for RCom to complete its sale to Jio and, in turn, pay-off Ericsson.
India’s Supreme Court will hear the case between Ericsson and RCom on 4 October.Subscribe to our daily newsletter Back