RCom opposes proposal to remove cross holding exemption
New Delhi: Reliance Communications in a letter to Telecom Minister Kapil Sibal has said that DoT's proposal on removing exemption given on cross holding norms, if implemented, "will tantamount to closing operations of Reliance Telecom" -- its GSM arm.
RCom in the letter dated May 29 opposed the recommendation of a DoT panel which said that no promoter or beneficial owner of a telecom service provider should be allowed to hold any stake or voting rights, either directly or indirectly, in any other company holding spectrum in the same service area.
"The present proposal of the DoT ... For holding substantial equity of more than 10 percent, at this stage, will tantamount to closing the operations of RTL at the time of renewal of the licences, which are due in December 2015," RCom said in the letter.
Prevailing licence term allows telecom operators to hold up to 10 percent stake in other telecom operators.
Reliance Telecom (RTL) has permit for providing GSM services in eight telecom circles, of which six service areas -- Bihar, Odisha, Madhya Pradesh, West Bengal, Himachal Pradesh and Kolkata -- are common with RCom.
"RCom provides cellular mobile services using CDMA technology and RTL provides cellular mobile services using GSM spectrum in these (six) circles," RCom said.
RCom provides CDMA technology based services in 20 telecom service areas. In Assam and North East, the company provides only GSM services through RTL.
RCom has contested that company has got approval from DoT for dual technology services, CDMA and GSM, in 20 service area but was not allocated GSM spectrum in the service area common with RTL.
The company added that there were no cross holding restriction in telecom licences when both RTL and RCom were issued licences in 1995 and 2001.
RTL also holds 3G spectrum in six service area that are common with RCom and the licences of the company have to be extended till at least 2030 as per the 3G auction rules, RCom said.