RCom requests DoT to quickly reply to tribunal on SUC issue

NEW DELHI: Reliance Communications (RCom) is pushing the department of telecommunications (DoT) to expedite its response to the telecom tribunal on the Spectrum Usage Charge (SUC) demand the financially stressed telco has disputed, people familiar with the matter said.

RCom’s push for a hearing before the scheduled September 20 date comes at the time when the Anil Ambani-owned company is racing against time to complete its asset sale to Reliance Jio Infocomm by September 30. RCom has to pay Rs 550 crore as settlement to Sweden’s Ericsson by the end of this month, failing which any sale to Jio will be nullified and the carrier will be dragged back into insolvency proceedings.

According to the sources quoted above, both RCom and DoT officials have had meetings to discuss the issue of SUC that has now landed in the Telecom Disputes Settlement and Appellate Tribunal (TDSAT).

“Appeals have been made by RCom to DoT to respond to the appeal in TDSAT so that the hearing can be expedited. DoT may agree to this request since they do not gain anything by delaying the case,” said one of the persons quoted earlier.

It all started last month when DoT asked RCom to furnish around Rs 3,000 crore as SUC or give bank guarantees of the same sum. Historically, telcos have stymied DoT’s efforts to recover annual dues such as SUC and licence fees saying the definition of adjusted gross revenue (AGR) was still disputed in court.

RCom, already weighed by a debt of Rs 46,000 crore, protested telecom department’s threats that its spectrum sale to Jio will not be given clearances unless the guarantees are provided.

The Anil Ambani-led telco then moved TDSAT, which sought replies from the DoT and set the next hearing for September 20.

RCom also needs to budget for additional time as either party — itself or the DoT — is likely to challenge any adverse TDSAT order in the Supreme Court.

A speedy completion of the roughly Rs 17,000-crore Jio deal is critical for RCom not just to pay Ericsson but also to repay other 39 lenders. RCom also needs to pay minority shareholders of its tower arm — Reliance Infratel — Rs 232 crore under a separate settlement of another dispute.

Of the Rs 17,000 crore, so far, the telco has only managed to sell Jio its optic fibre and related assets for Rs 3,000 crore and media convergence nodes (MCNs) and related infrastructure for Rs 2,000 crore.

RCom wireless assets that will eventually go to Jio include 122.4 units of 4G airwaves across the 850, 900, 1800 and 2100 MHz bands and over 43,000 telecom towers housed under Reliance Infratel.

RCom’s asset monetisation deal is with Jio for fibre, spectrum, MCN, tower.