Airtel to challenge DoT demand of Rs 8.2k cr guarantee for Tata Tele deal

Mumbai: Bharti Airtel will soon move the appellate tribunal, challenging the telecom department’s demand of Rs 8,200 crore in bank guarantees as a condition for giving its final nod to the merger of the consumer mobility business of Tata Teleservices with itself. “Airtel will appeal in the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) against the demand of bank guarantees of about Rs 8,200 crore from the government, which are for one-time spectrum charges (OTSC),” said a person familiar with the development. “There is another Rs 800 crore worth of deferred spectrum charges that has been demanded, which the operator will pay.” Airtel declined to comment.

As part of a conditional clearance to the merger, DoT had recently asked the country’s second-largest telco to furnish about Rs 9,000 crore in the form of bank guarantees and cash against OTSC and deferred spectrum dues. A similar notice was sent to Tata Teleservices. “This is a very big amount, and the telco will move court rather than first make the payment and then appeal against it,” said the person quoted earlier. This won’t be the first time that the Sunil Mittal-led operator is challenging the government’s demands.


When Airtel had acquired Telenor, it had moved TDSAT against the DoT’s demand of bank guarantee of around Rs 1,700 crore. The case went up to Supreme Court and the government was directed to clear the deal without the mobile phone operator having to pay the guarantees.

Last week, Airtel, in a regulatory filing on the conditional clearance to stock exchanges, had hinted at challenging the department’s demands. “...such matters, being sub-judice, may be challenged before the sectoral appellate authority/courts and disclosing such premature matters may affect the market prices inappropriately,” it had said.

Both Tata Teleservices and Airtel have confirmed that they have received conditional nods for the merger from the department.

However, the demand for dues does not include any licence fee or spectrum usage charge (SUC), which has been a contentious topic in the sector. Historically, telcos have stymied DoT’s efforts to recover annual dues such as SUC and licence fees on the grounds that the definition of adjusted gross revenue (AGR) was still disputed in court.

Airtel and Tata Teleservices had announced their merger in September 2017. As per the agreement, Airtel will take in the Tata Group-owned telco’s consumer mobile operations in 19 telecom circles -17 under TTSL and two under Tata Teleservices Maharashtra Ltd.

For Airtel, the merger will bring in an additional 178.5 MHz of spectrum in three bands that are widely used for 4G, an area where the company is focusing to keep pace with Reliance Jio.