Department of Telecommunications won’t renew licence until RCom clears dues

The Department of Telecommunications won’t renew licence for Reliance Communications’ (RCom) telecom unless it clears its statutory dues of $171,763.

This followed the resolution professional’s (RP) communication to the department that as per Insolvency and Bankruptcy Code, its dues come under a moratorium and it does not have to pay them.

The Department of Telecommunications won’t renew license unless previous spectrum related dues are cleared.

If the bankrupt telco fails to do so it will be forced to surrender its spectrum and its asset sale plan under the insolvency process will get derailed.

Rcom response

In addition, RCom had written to the DoT, requesting that its telecom licence be renewed for another 20 years.

RCom owns a pan-India telecom licence and holds airwaves in the 850 MHz band in 14 of India’s 22 telecom circles. Its permits expire in July.

The telco, previously owned by Anil Ambani, is currently being run by its RP, accounting to Deloitte, as part of an insolvency process under the IBC after it went bust with $617 crore of debt.

The RP might transfer the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) in opposition to the DoT choice.

While RCom’s consumer mobile phone business shut down in late 2017, it is still running its business for enterprises. It hasn’t paid any of its $348 crore adjusted gross revenue (AGR) dues demanded by the DoT, citing its ongoing bankruptcy proceedings.

Under the IBC proceedings, RCom’s committee of creditors in March 2020 cleared a resolution plan that would see asset reconstruction firm UVARCL pick up the company’s spectrum for $171 crore, staggered over 12 years, with Rs 5 crore of upfront cash payment.

That is a big chunk of the $268 crore expected from the sale of assets in RCom and its two units – Reliance Telecom and Reliance Infratel. Besides spectrum, the assets on sale include towers, fibre, enterprise business, data centres and land.