8 April 2019: Reliance Communications missed its second straight spectrum payment, this time of about Rs 281 crore, which fell due on April 5. However, the company is banking on a case in the appellate tribunal to stop the Department of Telecommunications from cancelling its licences and withdrawing the airwaves.
“RCom has missed its payments for the second time but we will await the court’s order to see if we need to challenge or find any other way of recovering the dues. Our hands are tied till then,” a senior DoT official said, asking not to be identified. The official was referring to a dispute between DoT and RCom over spectrum dues, which the National Company Law Appellate Tribunal (NCLAT) is scheduled to hear on Monday.
RCom didn’t respond to ET’s emailed queries seeking comment on the matter.
The tribunal recently stayed DoT’s show-cause notice to RCom and asked the telco to explain why its licence and spectrum for Mumbai shouldn’t be withdrawn after defaulting on a Rs 21 crore spectrum payment that fell due in March.
RCom responded by saying it should be exempted from paying the dues because it was under a payment moratorium from an earlier appellate order related to a separate filing for insolvency and therefore, its licence cannot be revoked.
The telco also said the department was yet to return Rs 2,000 crore of bank guarantees despite an appellate court’s orders. It said the DoT had encashed an excess of Rs 750 crore of bank guarantees over the past few years, which must be returned as well.
RCom, under debt of Rs 46,000 crore, has missed paying Rs 21 crore for the spectrum in Mumbai, which fell due on March 13, and Rs 281 crore for eight circles, which was due on April 5. Both dates included a 10-day grace period. The operator has to pay Rs 492 crore for 13 circles later this month.
Withdrawal of RCom’s spectrum for non-payment of dues would likely hit the services of Reliance Jio Infocomm, which shares the airwaves in 21 circles. RCom and Jio’s spectrum-sharing deal is also under government scrutiny since DoT officials have said that it is disallowed in circles where there’s been a default in payment.
RCom and DoT have been waging many battles over spectrum dues and one-time spectrum charges. The Anil Ambani-owned operator has even blamed the government for scrapping the sale of its spectrum to Jio.