Airtel’s acquisition of Tikona’s wireless business unit will create a loss of Rs 217 crore to the government if the authorities allow the proposed acquisition, Reliance Jio said in a letter to the DoT, reports Economic Times. Jio said in the letter that Airtel is “misusing” Mergers and Acquisition (M&A) guidelines since the proposed Airtel-Tikona deal is a spectrum sharing deal, and that Airtel has arranged it as an M&A deal. The report added that this allows Airtel to “circumvent spectrum trading guidelines which only permit trading between access service (data, voice) providers and not from ISP holders (broadband, fiber),” Jio added. On being contacted by MediaNama, a Jio spokesperson said that Jio cannot provide any official statement on this or give a copy of the letter to MediaNama.
However, Airtel has denied these allegations. The company said in a statement that it “has always been and will continue to be fully compliant with all regulatory guidelines. We strongly deny these allegations, which is yet another mischievous attempt to throttle/block competition.” Airtel confirmed in March that it is acquiring Tikona’s 4G business unit which holds the Broadband Wireless Access (BWA) spectrum (meant for 4G) in 5 telecom circles. The deal is, however, pending approval from regulatory bodies. Note that this acquisition will place Airtel in a better position to compete with Jio since it has 4G spectrum in 21 circles, while Jio has 4G spectrum in all 22 circles.
This IANS report quotes Jio’s letter in which the telco claims that Airtel will have to pay an amount equal to the difference between entry fee of a UASL license (meant for voice, data) and an ISP License (meant for fiber and broadband). This because Airtel holds a UASL license and Tikona owns an ISP license from the DoT. If the acquisition goes through, Airtel will have to convert Tikona’s ISP license into a UASL license by paying the differential amount, as per Jio’s letter.
Jio v/s Airtel
Jio and Airtel have a history of legal cases, allegations against each other over a number of issues like:
–Allegations of regulatory violations,
–Impartial voting rights at COAI
Apart from this Jio has a number of legal cases involving other rivals:
–TRAI v/s Airtel, Idea (TDSAT) on allegations that Jio violated tariff regulations and that TRAI was a “mute spectator”.
–Vodafone v/s Jio and TRAI (Delhi HC) wherein Vodafone alleged that TRAI failed to keep a check on Jio and its free offers.
–Vodafone v/s TRAI (Delhi HC) challenging telecom regulator TRAI’s Rs 1050 crore penalty. TRAI had imposed a combined fine of Rs 3050 crore on Airtel, Idea and Vodafone stating they were found to “willfully violate the license conditions” by denying interconnection points to Jio.
–CCI’s investigation into COAI after Jio complained about alleged anti-competitive practices committed by Airtel, Idea, Vodafone India and COAI.