The government of India is exploring legal options to see if it can get back the spectrum assigned to bankrupt telecom operator Reliance Communications, telecom minister Ravi Shankar Prasad said.
Anil Ambani-owned Reliance Communications has three types of spectrum — GSM spectrum in the 1800 MHz band that it got along with its license, spectrum that the company won in auctions by paying full market price and spectrum that it got along with its license, but was subsequently converted into ‘multi-use’ by paying full market price.
The first category of spectrum was being used by the company for running its GSM service, while the latter two types of spectrum were being used to provide 3G and 4G services.
Out of the second category, some of the spectrum being used for 4G services are under a sharing agreement with Reliance Jio, India’s top 4G operator.
When a company goes bankrupt, the government typically tries to repossess any spectrum that was ‘administratively allocated’ to it, and re-auctions the same at market prices.
Out of the three bankrupt GSM operators — RCom, Aircel and Videocon — Videocon had converted all its ‘administratively allocated’ spectrum to multi-use spectrum by paying the full market price, subsequently sold it to other operators. This left nothing for the DoT to try to recover.
In case of Aircel, when the DoT moved to take back the administratively allocated spectrum, the operator managed to win a stay order from the National Company Law Tribunal.
The DoT subsequently filed an affidative before the Tribunal pointing out that “the spectrum and license [allocated to Aircel] are liable to be revoked/ terminated on failure to make payments.”
The matter of Reliance Communications too has in recent months reached the NCLT after lenders failed to agree to a restructuring plan formulated by the owners and the management.
It is likely that any move to recover RCom’s spectrum too will have to go through the NCLT.
“In respect of spectrum assigned to Reliance Group of Companies, legal opinion / options are being examined,” Telecom Minister Ravi Shankar Prasad said on Thursday.
The government is planning to hold an auction of various types of spectrum, including 1800 MHz, later this year.