DoT to oppose sale of spectrum rights by bankrupt cellcos

India’s Department of Telecommunications (DoT) intends to use all legal means to oppose the sale of spectrum by bankrupt cellcos, the Economic Times reports, citing an unnamed senior DoT official. The move is expected to cause further difficulties for Reliance Communications (RCOM) and Aircel, both of which are currently progressing through insolvency proceedings. The official explained that the DoT’s view is that the spectrum belongs to the government and not the telco and, as such, the state is the only entity entitled to sell the resource. If the spectrum rights were sold via as part of the bankruptcy process the value would be far below its market price, and the DoT would be amongst the last entities to be paid from the proceeds as financial lenders take precedent over operational creditors such as the ministry, a second DoT official with knowledge of the matter was cited as saying. Without their spectrum holdings, however, the companies are likely to be of little value to potential buyers, leaving the cellcos with little opportunity to clear their outstanding debts.