Debt-hit RCom seeks to give up Rs 340 crore worth spectrum

NEW DELHI: The troubles for Anil Ambani's telecom venture -Reliance Communications (RCom) -appear to be compounding. The loss-making company, which had earlier sought deferment in debt servicing obligations from banks, has approached the telecom ministry to surrender a part of its spectrum holdings in the 1,800-MHz frequency, sources said.

The company has also sought a refund of some of the payments, which have been made, the sources added.

The move, if allowed by the government, will also enable the debt-laden company to escape paying the instalments towards the purchase of spectrum that it now wants to surrender. This is perhaps the first time when a company has sought to return the much-cove ted airwaves to the government. "RCom has written to the telecom ministry , seeking to surrender small quantities of spectrum in four circles," an official source told TOI. "The spectrum to be surrendered is in Mumbai, Karnataka, Haryana and Punjab and has been purchased for around Rs 340 crore."

The quantity of spectrum in each circle is 0.6 MHz. While in Mumbai, it was purchased in 2014, the bids for the other three were won in 2016. According to the spectrum purchase agreement with the government, while 33% of the bid amount has to be paid immediately , the rest of the money (including interest outgo) has to be paid over a 10-year period following a moratorium of two years.

The Mumbai spectrum was purchased for around Rs 160 crore, Karnataka for Rs 108 crore, Punjab for Rs 42 crore and Haryana for Rs 27 crore. "The down-payments had been made for the circles at the time of the purchase while for Mumbai, the first instalment has been paid this year. For the other three circles, the instalments start only from next year," said the source.

However, industry analysts said that surrender of airwaves looks highly improbable as there appears to be no clause in the spectrum sale documents for such a measure. The analysts said that the proposal of RCom only highlights the "industry's pain".

Reliance Communications (RCOM)