RCom blames government for latest Ericsson woes - Mobile World Live

RCom blames government for latest Ericsson woes

03 OCT 2018

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.



Kavit Majithia

Kavit joined Mobile World Live in May 2015 as Content Editor. He started his journalism career at the Press Association before joining Euromoney’s graduate scheme in April 2010. Read More >>

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