Why DoT rejects RCom-Jio spectrum deal

DoT refused to give clearance to RCom Reliance Jio Infocomm deal


Telecom Department has given a note to Reliance Communications (RCom)and Reliance Jio Infocomm. DoT told that their RCom-Jio deal on the spectrum does not follow the government’s spectrum trading guidelines. This has made Anil Ambani’s RCom a major setback. This is because it will be difficult for the creditors to avoid the deal and avoid the insolvency processing.

Jio wrote a letter to the Telecom Department (DoT) asking for the assurance. Assurance that he will not be held liable for the past dues related toRCom’s spectrum. After this, the DoT has notified the deal as per the guidelines.

In a letter sent to Mukesh Ambani, the owner of Jio said that in Spectrum Trading Agreement. It has been clarified that RCom-Jio will provide a bank guarantee to DoT for all disputed claims.

What was Reliance RCom-Jio Deal

Jio has said in the letter that he should only be considered responsible for the claim that after the sale of spectrum.

In the spectrum trading guidelines of the government, it has been said that the company buying spectrum will be responsible for the outstanding amount. But the amount has not been recovered from the company selling spectrum.

A senior DoT official said, “It is clear in the trading rules that both companies or any of them have to pay the outstanding amount. Due to the conditions of Jio, we can not accept it (Deal). Because it is not according to Guidelines. Now, these decisions have to be made by these companies. Until then, the deal will be halted. ‘

From this spectrum deal, RCom had to get the fund to pay the outstanding amount of Sweden’s telecom equipment company Ericsson. RCOM has missed the deadline for December 15, fixed by the Supreme Court for it first. Now the company faces the risk of facing insolvency processing. Along with this, the hearing may also be heard on the plea of contempt of court against company chairman Anil Ambani. Ambani gave personal guarantees to Ericsson to pay on time.

The Supreme Court asked DoT to accept corporate guarantees worth Rs 1,400 crore and a land parcel instead of bank guarantee for spectrum user charge of Rs 2,947 crore outstanding on RCom. However, RCom-Jio Spectrum does not agree with the amount of user charge.

DoT believed that if there is any problem with the corporate guarantee or land parcel, Jio will have to pay this as it is buying spectrum. But Geo has refused to accept any kind of liability.

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