DoT to issue demands for Airtel/TTSL tie-up

12 Mar 2019

The Department of Telecommunications (DoT) is expected to ask Bharti Airtel and Tata Teleservices Limited (TTSL) for bank guarantees totalling around INR150 billion (USD2.15 billion) for approval of the latter’s takeover by Airtel. The Economic Times quotes an unnamed DoT official as saying that the duo will have to provide guarantees related to spectrum usage charges (SUC) and one-time spectrum charges (OTSC). The DoT is due to issue demand notices shortly, according to the source, but expects the request to be challenged by the cellcos. The OTSC fee in particular is likely to be contentious, as the price is based on adjusted gross revenue (AGR), the definition for which is the subject of a long-standing – and ongoing – legal dispute.

As previously reported by TeleGeography’s CommsUpdate, the cash and debt-free acquisition was first agreed in October 2017 and, with a view to accelerating the regulatory approval process, the pair announced in October 2018 that Airtel would take on the necessary liabilities to complete the transaction, including covering licence fees and spectrum charges. Despite Airtel taking responsibility for the payments, TTSL parent Tata Sons is nevertheless expected to provide the funds for the outstanding fees.