The road ahead is likely to get tougher for bankrupt telcos like Anil Ambani’s Reliance Communications and Aircel as the Department of Telecommunications (DoT) is planning to oppose the spectrum sale of airwaves held by such operators.
A DoT official said that the department will take all the necessary steps to ensure that the resolution professional does not get the right to sell spectrum during bankruptcy proceedings. According to a report in The Economic Times, the DoT is expected to make its position clear during the ongoing hearing of Aircel bankruptcy proceedings at the National Company Law Tribunal (NCLT).
The official said that as per DoT, the spectrum belongs to the government and does not come under the definition of property of telcos. The official also explained that since spectrum is finite and a sovereign asset, government is the sole authority that is responsible for allocating it.
Another official told the daily that legal opinion is being sought and all legal options are being explored.
The DoT is also of the opinion that if spectrum is sold by the resolution professional under IBC, then the value will be far less than the market price of airwaves.
The result of the final decision will affect the insolvency, bankruptcy and revival proceedings of operators like Aircel and RCom. The companies would have little to no value without the airwaves. RCom has a debt of Rs 46,000 crore, while Aircel has a debt of Rs 20,000 crore.
Source: Business Today, June 6, 2019