DoT demands return of Aircel spectrum

11 Jun 2019

The Department of Telecommunications (DoT) has stepped up its efforts to reclaim spectrum from bankrupt cellco Aircel, demanding that the firm return its airwaves on the basis that the DoT is owed dues from the defunct provider. The Economic Times writes that the company’s lenders are hoping to hand off Aircel’s assets, including the spectrum to UV Asset Reconstruction, but the government has challenged the move, claiming that ‘spectrum is not an asset of any company’ and ‘is only granted for permissive usage and not an asset to be occupied’. The DoT’s legal counsel Anil Singh was quoted as saying at a National Company Law Tribunal (NCLT) hearing that ‘We have large sums to be recovered and they continue to use our services without any payments. They are getting all the benefits while the dues are getting added. The licences are controlled by us and you do not own or purchase spectrum’.

The development follows a move earlier this week from the DoT to block the sale or transfer of frequencies by defunct cellcos such as Aircel, potentially hamstringing the bankruptcy resolution processes for Aircel and Reliance Communications (RCOM).

Arguing against the DoT, a representative for Aircel’s resolution professional explained: ‘Spectrum is an intangible asset for the service provider. This is the single asset we have and without this, the corporate insolvency process will fall through.’ The counsel went on to tell the bankruptcy court that its spectrum rights were worth between INR110 billion and INR200 billion (USD1.6 billion and USD2.9 billion) and, with the exception of the rights covering the Tamil Nadu circle, were not due to expire until 2026. Aircel’s representative went on to stress that the withdrawal of the spectrum would send the company straight into liquidation.