RCom, RJIL to sign spectrum sharing/trading deal next week

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Reliance Communications (RCom) and Reliance Jio Infocomm (RJIL) are likely to sign spectrum trading and sharing agreements next week.

According to sources, as part of the agreement, RCom will receive about Rs. 4,500 crore from RJIL for sale of 800-850 MHz spectrum in 12 circles. The proceeds from the sale will be used to pay liberalisation fees to Department of Telecom (DoT).

Post trading, both the companies will share spectrum in all 22 circles, the source added.

DoT on December 22 had issued a notice and sought about Rs. 5,600 crore from RCom for liberalising spectrum in 16 circles.

Also, the operator had been asked to submit a bank guarantee of about Rs. 1,569 crore for one time spectrum charge (OTSC).

As the liberalisation fee is payable only for balance spectrum validity period, so the final amount to be paid by RCom is likely to be about Rs. 5,400 crore.

The source said RCom has to pay within one month of issue of notice, so the final amount to be paid is lower as they don’t have to pay from December 22 onwards but from the time its spectrum is liberalised, which is likely to be January 23.

Post the deal, RCom and RJIL will be only operators offering 4G LTE services on 800-850 MHz band nationwide.

Regarding the one time spectrum fee, sources said payment is not required as it has been stayed by High Court and the matter is sub-judice.

When contacted, Reliance Communications declined to comment.

Reliance Group Chairman Anil Ambani had announced RCom was tying up trading and sharing of spectrum with Mukesh Ambani-led Reliance Jio including for the much-awaited 4G services.

Addressing the annual general meeting, Anil Ambani had said both the companies were at “an advanced stage of discussion” for finalising a nationwide spectrum trading and sharing arrangement.

RCom had applied for liberalising its 800 MHz spectrum in 20 circles a few months back. The company, however, is yet to receive any notice for the remaining four circles, where market determined price is not available.

The four circles are Kerala, Karnataka, Rajasthan and Tamil Nadu.

The DoT had already sought sectoral regulator TRAI’s views on liberalisation of spectrum in circles where market determined price is not available.

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