According to the Department of Telecommunications or DoT, Reliance Infocomm cannot trade their airwaves with Reliance Jio. The reason behind the denial is that the deal does not follow the prementioned guidelines. Thus, Reliance Infocomm faces a huge set back in its struggles to avoid the process of insolvency and repay the investors.
Reliance Jio has sent a letter to the Department of Telecommunications. The letter emphasizes the fact that Reliance Jio will not be responsible for the past dues pertaining to airwaves that are held by RCom. However, the norms of the government spectrum trading are different. According to the government rule, the buyer must be responsible for the dues that have not been cleared by the seller.
As per a senior official of DoT, the department can ask either RCom or Jio to repay the debts according to the law. As Jio has rejected to be liable for the dues of RCom, the government department cannot give a green signal to the deal. It depends on the parties whether they want to make the deal. Thus, until either of RCom and Jio approaches, the deal will not take place.
RCom will continue to see a setback caused by the cancellation of the spectrum trading deal. The share of the company closed on 15.78 INR on Tuesday, up by 0.77%. Had the deal taken place, RCom would have settled its 550 Cr INR payment with Ericsson.
According to some sources, Reliance Jio has submitted the agreement that had taken place between RCom and Jio in 2017. Jio claims that the agreement clearly mentions that the dispute claims will be addressed by RCom even after the deal is done.
As per the order of the Supreme Court of India, DoT should approve the deal against 1400 Cr INR corporate guarantee. However, as DoT wanted Jio to take responsibility in case of any corporate issues, Jio rejected the liability.