Loop customers at sea as merger with Airtel hits DoT hurdle

The delay has hit over three million customers of Loop who were asked to port out to Airtel network before November-end when Loop's license expires

Customers of Loop Telecom here are complaining of frequent network outage as the merger between Loop and Airtel has hit a hurdle with the Department of Telecom (DoT). The delay has affected about three million Loop customers, who were asked to port out to the Airtel network before November when Loop’s licence expires.

Many customers say their Loop phones have simply stopped working and Loop’s customer care department has stopped taking complaints. Many customers have received calls from Airtel to deposit KYC (know your customer) documents with it, in order to port out to the Airtel network. However, the Telecom Regulatory Authority of India (Trai) has objected to the porting, saying a customer cannot be forced to port out to a new network at the customer’s cost.

Calls to Loop’s top officials went unanswered. Airtel declined to comment on the matter.

DoT has not cleared the merger as Loop Mobile and its sister concern owes the department about Rs 800 crore. The DoT has held up the clearance related to the deal as the payment has not been made yet to the government.

Loop Mobile had, in a letter March 10, 2014 letter, informed DoT that it was unable to renew its licence due to various commercial reasons and would, therefore, cease to provide its services with effect from November 29. The company is now owned by the Dubai-based relatives of the Ruias of Essar. Trai has asked the company to inform its customers that it will not be able to provide wireless telephony services in Mumbai.

Loop Telecom was one of the first entrants to the wireless telecom sector. The company was set up as BPL Mobile by Rajeev Chandrasekhar. He later sold the company to the Ruias of the Essar group.

However, as Loop Telecom was embroiled in the spectrum scam and all its nationwide licences were cancelled by the Supreme Court, the company did not buy spectrum to continue its operations in Mumbai. Early this year, Loop entered into an agreement with Bharti to sell off its assets for Rs 700 crore.

Many of Loop’s towers and buildings are hypothecated to banks for raising loans and bankers say Airtel will also have to take over this liability. Apart from Rs 124 crore to be paid to DoT, Loop Telecom Ltd and its promoters are also facing a trial for the alleged offence under section 420 (cheating) along with 120-B (criminal conspiracy).

NETWORK JAMMED

• Many customers say their Loop phones have simply stopped working and the company’s customer care department has stopped taking complaints
   
• DoT has not cleared the merger as Loop Mobile and its sister concern owe about Rs 800 crore to the department