Airtel-Jio Spectrum Trading deal still subject to statutory approvals as of today

Telecom giant Bharti Airtel’s spectrum trading agreement with rival telecom service provider Reliance Jio Infocomm Limited is still subject to statutory approvals as of the date. The company in its Annual Report published late night yesterday offered an update on the Spectrum Trading deal. Airtel and Reliance Jio had entered an agreement for the transfer of the ‘Right to Use’ of its 800 MHz spectrum in Andhra Pradesh, Delhi, and Mumbai on unpaired terms. In Andhra Pradesh, the agreement covered a 7.5 MHz spectrum, 2.5 MHz spectrum in Delhi, and another 5 MHz spectrum in Mumbai.

“In April 2021, Airtel announced an agreement with another Telecom Service Provider to transfer the ‘Right to Use’ of its 800 MHz spectrum in Andhra Pradesh (7.50 MHz), Delhi (2.50 MHz), and Mumbai (5.00 MHz) on unpaired terms which is subject to statutory approvals as on the date of this report,” said Bharti Airtel in its Annual Report.

The spectrum trading agreement announced in April 2021 will generate a consideration of Rs 1037.6 crores from India’s leading telecom service provider Reliance Jio. RJIL will take up the further liabilities of Rs 459 crore relating to the spectrum with the aggregate value for the right to use the spectrum at Rs 1497 crores.

As per the Department of Telecommunications (DoT), Spectrum Trading is permitted only on a pan-LSA basis. Spectrum Trading doesn’t alter the original validity period of the spectrum assignment. DoT currently allows spectrum trading only for spectrum assigned in the year 2010 or afterward, or on which the telecom service provider (TSP) has already paid the prescribed market price.

Access Service licensees normally need to jointly give a prior intimation for trading the right to use the spectrum at least 45 days before the proposed effective date of the trading. The duo also needs to give an undertaking that they are in compliance with all the terms and conditions of the spectrum trading guidelines and the license conditions. The seller also needs to clear its dues prior to concluding any agreement for spectrum trading.