The Supreme Court has dismissed a petition by the Department of Telecommunication (DoT) to secure bank guarantees from Airtel as a pre-condition to approve the telco’s buyout of Telenor India. With this order, the deal is set to get the only remaining approval it needed (of the DoT), and will reportedly be cleared in a week.
“The Special Leave Petition is dismissed. Pending application(s), if any, stands disposed of accordingly,” Justices SK Sikri and Ashok Bhushan said in their order on Wednesday.
The DoT had asked for a bank guarantee of Rs 1,499 crore for one-time charges for spectrum (OTSC) allocated to the carrier without auctions, and over Rs 200 crore for deferred payment for airwaves owed by Telenor to give a green signal to the deal. This was earlier challenged in the Telecom Disputes Settlement & Appellate Tribunal (TDSAT). The tribunal had also ordered the DoT to approve the merger without guarantees, and the DoT then moved the Supreme Court on the matter on May 3.
Earlier, the DoT had also asked Bharti Airtel to submit an undertaking saying that it will be liable to pay pending dues with respect to merger of the two companies and all demands which may be raised by for Telenor India. The Bharti Airtel spokesperson added that a letter of compliance on this has been submitted.
The merger of Telenor with Airtel has been approved by the National Company Law Tribunal (NCLT) on March 8. The deal already has approvals from the Competition Commission of India (CCI), the market regulator Sebi and stock exchanges BSE and NSE.
Airtel’s acquisition of the India operation of Norway-based Telenor was announced in February 2017. The deal entailed transfer of all of Telenor India’s assets, licenses, and customer base of 44 million into Airtel including Telenor’s active operations in 7 circles—Andhra Pradesh, Bihar, Maharashtra, Gujarat, UP (East), UP (West) and Assam. This was to add Airtel close to 43.4 MHz of additional spectrum in the 1800 MHz band to Airtel’s kitty. In the no-cash deal, the Indian telco will take over all outstanding spectrum payments and other operational contracts, including tower lease contracts as due on Telenor.