Bharti Airtel’s attempts to avoid paying “voice conversion charge” on the spectrum that it is purchasing from internet service provider Tikona Digital could end up unintentionally benefiting arch rival Reliance Jio.
Reliance Jio was forced to pay around Rs 1,650 cr four years ago to the government after telecom players protested that the company did not have the right to use spectrum purchased under a non-voice license for voice services.
Industry biggies claimed that at the time of purchasing the spectrum, Infotel Broadband Services — as Jio was known at the time — did not have a voice license, but only an internet service provider license.
Infotel subsequently purchased a voice license. However, they argued, that a ‘voice conversion charge’ should be imposed on the earlier spectrum if it is to be used for voice services.
Jio, on its part, argued that the auction documents clearly stated that if the owner of the spectrum had a voice license, the spectrum could be used to offer voice services without any charges. It said that since it has subsequently acquired a voice license, it should be allowed to offer voice services.
However, the department of telecom disagreed with Jio’s position and asked the company to pay around Rs 1,650 cr to use the ‘non-voice spectrum’ for voice services.
With the matter threatening to snowball into a legal controversy that could delay the launch of its 4G services, the Mukesh Ambani-led company quietly chose to pay the money and get it over with.
BACK TO HAUNT
Four years on, the same controversy is now threatening to cost of hundreds of crores of rupees to incumbent operator Bharti Airtel.
In a letter to the Department of Telecom, the Mukesh Ambani firm has asked the Department of Telecom to apply the same charges that were applied to it to Bharti Airtel also.
The firm pointed out that Airtel is buying broadband wireless spectrum from Tikona Digital for use in its voice network. This spectrum was acquired by Tikona when it held a non-voice ISP license, and the same ‘voice conversion charge’ be applied to this spectrum as well.
Airtel is learnt to be unwilling to pay the voice conversion charge of Rs 650 cr — including for its previous acquisition of Qualcomm’s spectrum. As such, it has approached the Telecom Disputes Redressal Tribunal.
According to legal experts, the tribunal is likely to dismiss the need for a ‘voice conversion’ charge as insisted by the DoT for using 2300 MHz spectrum for voice services.
While this will save Rs 650 cr for Airtel, it will also lead to a refund of Rs 1,650 cr to Jio, or around Rs 2,000 if interest is included.