RCOM looks to reclaim INR12bn from Etisalat; Etisalat sues local partner

24 Feb 2012

Indian wireless operator Reliance Communication (RCOM) is seeking to recover INR12 billion (USD241.89 million) in unpaid fees for the use of its wireless infrastructure from Etisalat DB (EDB), reports the Deccan Herald. EDB, a joint venture between UAE-backed Etisalat and India’s Dynamix Balwas Group (DB) signed a ten-year contract with RCOM in 2009, agreeing to lease infrastructure to provide 2G wireless services. However, following non-payment of fees in January, RCOM disconnected Etisalat. RCOM reportedly filed its case with Telecom Disputes Settlement and Appellate Tribunal (TDSAT) yesterday after Etisalat announced officially that it was shutting down operations.

Meanwhile, the UAE-based telco is planning to take legal action against DB, blaming its partner for the recent cancellation of the joint venture’s operating licences. A statement issued by the company said: ‘Etisalat was induced into its investment in the company that was then Swan Telecom, without any disclosure of the matters that are now alleged by the CBI [Central Bureau of Investigation] and Supreme Court. Etisalat is facing very significant financial losses on its investment in EDB despite having no involvement in the 2G licence application or award process and being entirely innocent of any allegations relating to it.’ Etisalat is the second foreign company to announce that it would be taking its local partner to court over the Supreme Court’s decision to revoke 122 licences: Norway’s Telenor is seeking damages from its partner Unitech, also on the basis that Telenor entered the company after the controversial concession had been issued.

India, Etisalat DB (formerly Swan Telecom), Reliance Communications (RCOM)