Reliance Communications alleges govt bias in Idea-Vodafone merger case

Reliance Communications has alleged DoT of adopting discriminatory approach by demanding bank guarantee from the company for one-time spectrum charges, while approving Vodafone-Idea merger without making similar demand, sources said today. However, the allegations have been rejected by the telecom department.

In a letter dated July 10, 2018 to telecom secretary Aruna Sundararajan, debt-ridden telecom firm Rcom referred to conditional approval given to Idea Cellular and Vodafone India to go ahead with their merger deal without insisting on any bank guarantee (BG) against pending one-time spectrum charges (OTSC) of Vodafone, as per the sources.

"We request DoT not to adopt any such discriminatory, inconsistent and unfair stand against RCom as compared to a completely opposite and favourable stand for Vodafone, and to instead release the bank guarantees of Rs 2000.1 crore immediately," RCom said.

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The telecom department has demanded payment of Rs 3,976 crore for one-time spectrum charge from Vodafone India, and a joint bank guarantee of Rs 3,342 crore before it grants final approval for the merger.

"The department is following the laid down rules as per relevant guidelines, including Merger and Acquisition Guidelines and Spectrum Liberalisation Guidelines. The representation of RCom is under examination," Shambhu Nath Choudhary, Director, Media, Department of Telecom said in response to PTI query.

RCom said that DoT has insisted on BGs against the disputed OTSC from the company at the time it approached the government for liberalising spectrum in 800 Mhz band in December 2015.

It said the DoT demanded BG despite the matter being sub-judice. "Not only that, the DoT has unilaterally increased the original OTSC demand, without any hearing or process, based on subsequent auction prices," RCom alleged.

The Anil Ambani led firm has alleged that OTSC dues of Vodafone are to the tune of Rs 9,000 crore, which is around 4 times of RCom. Telecom tribunal TDSAT on July 3 directed DoT to return BG of Rs 2,000 crore to RCom.

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In the letter RCom asked DoT to release its BG as per direction of TDSAT without filing any petition on this matter before the Supreme Court. Email sent to RCom and Vodafone elicited no immediate reply on the issue.