The India Department of Telecommunications (DoT) has demanded Aircel return its spectrum to the government since it has not cleared the arrears against it, creating a major hurdle in the carrier’s bankruptcy process that could hurt lenders.
Aircel Ltd, the debt-laden Indian mobile network operator based in Gurgaon is 74% owned by Maxis Communications Bhd.
DoT on Monday told the dedicated bankruptcy court that Aircel did not own the spectrum as an asset, a stance the defunct telecom operator opposed, saying that without airwaves, its entire resolution process would go kaput. The government’s stand, if accepted, could affect the bankruptcy process of another telco, Reliance CommunicationsNSE -2.78 %, as well, hurting its lenders too. Without spectrum — their most valuable asset — both telcos would be less attractive to buyers.
“Spectrum is not an asset of any company. It is only granted for permissive usage and not an asset to be occupied. Today, we have large sums to be recovered and they continue to use our services without payments,” DoT’s legal counsel, additional solicitor general Anil Singh, told a National Company Law Tribunal (NCLT) bench headed by Justice MK Shrawat.
“They (telcos) are getting all the benefits while the dues are getting added. The licences are controlled by us and you do not own or purchase spectrum,” the DoT lawyer said.