Tata TeleServices, Airtel to pay earlier dues of ₹15,000 crore to get DoT approval nod for merger

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The merger of Tata Teleservices limited (TTS) and Bharti Airtel may have received approval nod from National Companies law Tribunal (NCLT) but the merger still has one hurdle to go. In order get the approval both the telecom companies have to pay their cumulative dues of about ₹15,000 crore.

Airtel and TTSL have to pay around ₹10,000 crore and ₹2,800 crore respectively as SUC (spectrum usage charges). Then the telecom company Bharti Airtel has to pay ₹2,000 crore as OTSC (one-time spectrum charges) in the form of bank guarantees to the government.

Earlier, Vodafone and Idea cellular which merged in August last year after the arrival of Reliance Jio had to pay the dues too. In that deal, Vodafone had to pay ₹3,900 crore for completing merger with Idea. The DoT had also asked Idea Cellular to render a combined bank guarantee of ₹3,342 crore before entering into the merger with Vodafone.

In October 2017, Bharti Airtel announced its plan of merger with TTS in a no-debt, no-cash deal. As per deal Airtel won’t pay TTSL’s ₹40,000 crore debt nor would pay any cash for the deal. However, as part of the merger agreement Airtel would assume a small portion of the unpaid spectrum liability of TTSL towards DoT, which would be paid on deferred basis. As per media reports, TTSL is expected to bankroll most of the dues even if Bharti Airtel formally assumes the responsibility to pay the dues.

Now, after this the chances of both the parties going to court against the OTSC charges are very high looking at the previous instances.


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