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TMCNet:  ABWL Merger: Airtel has to return excess spectrum, pay Rs 406-crore fee [India Business] [Times of India]

[June 10, 2014]

ABWL Merger: Airtel has to return excess spectrum, pay Rs 406-crore fee [India Business] [Times of India]

(Times of India Via Acquire Media NewsEdge) Bharti Airtel may have to surrender 1.2 Mhz spectrum in the Mumbai circle if it wants to merge its unit Airtel Broadband Wireless (ABWL) with itself and pay Rs 406.09 crore to migrate the wireless broadband subsidiary's internet licences in four service areas to unified access services (UASL) permits. According to an internal document , the telecom department (DoT) has said that the merger will be taken on record if Bharti Airtel agrees to conditions which include surrendering the excess spectrum and paying the migration fee. Merging the licences would result in the company holding airwaves beyond the permissible limit of 50% of the total bandwidth in the Mumbai service area. Bharti Airtel, India's No. 1 mobile phone operator, declined to comment. ABWL was formerly known as Wireless Broadband Services Ltd (WBSL), a wholly-owned subsidiary of US-based CDMA chipmaker Qualcomm. WBSL held 20 Mhz of airwaves in the 2.3 Ghz band in Delhi, Mumbai, Kerala and Haryana circles, and held an internet service provider (ISP) licence. Airtel last year acquired WBSL, renamed it ABWL, and then sought merging the unit with itself. After merging ABWL with the parent company, Airtel will have a total of 33.2 Mhz spectrum in the Mumbai circle once it is allotted the spectrum it won in the February auctions . According to the government rules, the company will have to surrender its excess spectrum within one year of the amalgamation. A senior executive Airtel, who asked not to be named, said the telecom department's demand of paying Rs 406.09 crore was totally unexpected. "Airtel already possesses UASL in these four circles. The clause requiring an ISP to pay the UASL entry is to bring parity between an ISP and a UASL when an ISP migrates to UASL" . The UAS licence allows a telco to offer voice services, among others , technically referred to as access services. For instance Reliance Jio Infocomm (RJIL), the telecom unit of Reliance Industries, recently paid the entry fee to migrate to the unified licence. RJIL possessed an ISP licence and was allowed to provide access services after it paid the entry fee. The executive argued that Bharti Airtel had already paid the entry fee and was operating access services. The company has also been asked to give an undertaking that it will pay up the dues regarding the one-time spectrum fees, depending upon the outcome of the court case.


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