DoT rejects Telenor demand for adjustment of Rs 1,658 cr

Adjustment not possible as Unitech, which paid entry fee in 2008, different from Telewings, which won spectrum in November auction

Norway-based telecom company Telenor will not be allowed to adjust the Rs 1,658 crore which Unitech Wireless, its former India joint venture, had paid as entry fee in 2008, against the charges of the spectrum it won in November.

According to a recent discussion, the department of telecommunications (DoT) doesn’t agree with the proposal to adjust the entry fee paid by Unitech against the spectrum charges of Telewings Communications, Telenor’s new entity in India.

Telenor, which entered the Indian market in 2009 through a joint venture (JV) with Unitech Group, bought back the latter’s stake in the JV after the Supreme Court cancelled its licence in February 2012.

The Norwegian firm later set up Telewings Communications to continue operations in India.

Telewings secured spectrum for six telecom zones— Gujarat, Bihar, Maharashtra, Uttar Pradesh east, Uttar Pradesh west and Andhra Pradesh — in the November auction.

“As we have stated earlier, we believe we are fully entitled to the licence fee set-off. In fact, we have been given reassurances of this by the government. We expect DoT to confirm this set-off to us at the earliest,” a Telenor group spokesperson said in emailed response to Business Standard.

DoT is, however, of the view that the fee paid by Unitech Wireless cannot be adjusted against Telewings’ dues, as the latter is a different company.

Telewings acquired spectrum in the six circles for Rs 4,018 crore. Telenor had to pay Rs 1,326 crore, or 33 per cent of the final bid amount, to the government as the first-year payment.

Telenor will not have any problem in transferring business and customers of Unitech Wireless to Telewings.

But the government might ask both entities to file separate indemnity bonds, indemnifying the government from any claims or disputes by any entity or third party arising on account of such transfer, as per the recent discussion.

After the indemnification, DoT will issue unified service licences and spectrum to Telewings in tune with the government rules mentioned in the notice inviting applications for the November auction.

According to the discussion, the government revenues should be protected and it should not be exposed to any liability on account of transfer of business and customers like the Telenor entities.