Merger of Tata Tele mobile service biz with Airtel approved


TECHNOLOGY | January 30, 2020:

The Department of Telecom is set to issue an approval letter for the merger of Tata Teleservices' consumer mobile business with Airtel next week while deciding not to pursue the case in the Supreme Court after the court declined to stay telecom tribunal TDSAT order that had cleared the deal with some payment.

"We will issue them (Airtel) the approval letter in February, official sources said.

Once the deal approval communication comes from the government, Airtel will get an additional 178.5 MHz spectrum in three crucial bands of "1800 MHz, 2100 MHz and 850 MHz" that are widely used for 4G network.

Not just that, the customers of Tata Teleservices will be on Airtel network and gain access to all tariff plans and other content services of Sunil Mittal's company.

The DoT had moved the Supreme Court against the telecom tribunal's order to clear the merger deal between Bharti Airtel and the consumer mobility business of Tata Teleservices in November last year.

This was after the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) in May partially stayed DoT's demand for about Rs 8,300 crore in bank guarantee on OTSC (one-time spectrum charges (OTSC).

As directed by TDSAT, Airtel had submitted a Rs 644 crore bank guarantee in TDSAT for Tata Tele merger after it granted partial stay on a Rs 8,300-crore demand raised by the telecom department from Bharti Airtel.

The tribunal had asked Airtel to submit 50 per cent payment of Rs 1,287.97 crore demand raised by the Department of Telecom (DoT) as OTSC for Chennai circle licence extension from November 30, 2014, to September 27, 2021.

While doing so, the TDSAT had asked DoT to take on record the merger of Bharti Airtel and Bharti Hexacom with demerged undertaking of Tata Teleservices.

It had asked Airtel to submit half of the Rs 1,287.97-crore demand raised by DoT as OTSC for the Chennai circle licence extension from November 30, 2014 to September 27, 2021 within four weeks.

The tribunal had also allowed the merging companies to "operationalise the spectrum and undertake other consequential activities".

Accordingly, while Airtel had paid the required amount and announced the completion of the merger in July, DoT did not give a formal approval.

As part of the agreement signed between Airtel and the Tata Group company in October 2017, Airtel was to absorb the telco's consumer mobile operations in 19 circles — 17 under Tata Teleservices and two under Tata Teleservices (Maharashtra) — and also to take over a small portion of the unpaid spectrum liability of Tata Teleservices.