RCom pays Rs 5,384 cr as spectrum liberalisation fee to DoT

Reliance Communications on Wednesday said it has paid Rs 5,383.84 crore (Rs 53.83 billion) as spectrum liberalisation fee to Department of Telecommunication for radiowaves in the 800/850 MHz band held by it in 16 telecom circles.

"RCom has on January 20, 2016 paid an aggregate amount of Rs 5,383.84 crore as liberalisation fee to DoT in relation to spectrum in the 800/850 MHz band held by it in 16 telecom circles," the company said in a statement.

"Kolkata High Court, vide its judgment dated January 14, 2016, has already directed that RCom is not required to furnish any bank guarantees for disputed OTSC, as required by DoT."

On Monday, Reliance Communications and Reliance Jio Infocomm entered into spectrum-trading and spectrum sharing agreements allowing Reliance Jio to now get spectrum in 850 MHz band from RCOM in 9 Circles, enabling it to offer 4G LTE services.

Spectrum trading will happen in 9 circles; subsequently Reliance Jio and RCom will share spectrum in 17 circles.

Sources said eventually, spectrum sharing to be done in all 22 circles (to begin with, 17 circles in Phase 1 as RCom is still awaiting 800 MHz spectrum liberalisation demand letter from DoT in 4 circles where there is no market price benchmark [Rajasthan, Kerala, Karnataka and Tamil Nadu) and in last circle, J&K, there are some technical considerations which are being sorted out.

As per sources, RCom got immediate payout of Rs 4,500 crore (Rs 45 billion) from Rel Jio, and these proceeds were used to pay the Spectrum liberalisation cost.

Access to enhanced spectrum footprint in the 800 MHz band will complement RJIL's LTE services rollout, providing increased network coverage and superior service quality

The spectrum arrangements between RJIL and RCom will result in network synergies, enhanced network capacity and optimise spectrum utilisation and capex efficiencies. Both operators see considerable savings in operating costs and future investment in networks.

Sources said that in all circles where RCom's spectrum holdings come down to 1.25 MHz post spectrum trading deal with Reliance Jio, the company will be get 3.75 MHz of 800-850 MHz band spectrum from MTS once it proposed merger with the Russian firm is completed.

In November, India's fourth-largest telecom operator RCom announced acquisition of Sistema's Indian telecom unit in an all-stock deal that will create an operator with 118 million subscribers.

As per the deal, SSTL will hold about 10 per cent stake in RCom and pay off its existing debt before closing the deal.

Russian tycoon Vladimir Evtushenkov-controlled AFK Sistema currently holds 56.68 per cent stake in SSTL while Russian government owns 17.14 per cent interest. Shyam Group has 23.98 per cent stake and the rest is owned by small investors.

SSTL offers mobile telephony services under MTS brand across nine telecom circles in the country.