Airtel

Airtel may pay DoT Rs 436 crore for broadband unit's merger

  NEW DELHI: Bharti Airtel, India's No. 1 telecom carrier, may have to Rs 436 crore for merging its subsidiary Airtel Broadband Services Pvt Ltd (ABSPL) with the company, as the transaction would mean a change in the unit's permit from that of an internet provider to a unified licence.

Bharti Airtel acquired the business from US-based Qualcomm's broadband wireless access (BWA) operations last year. It then renamed the unit Airtel Broadband Services.

ABSPL has an internet service provider's licence to provide wireless broadband. Merging the unit with Bharti Airtel, which holds a unified licence to provide telecom and internet services, will allow Bharti Airtel to use ABSPL's bandwidth to provide all kinds of wireless telephony, and not just internet. An internal note of the Department of Telecommunications (DoT), seen by ET, cites this as one of the reasons to seek a payment from the company.

Secondly, the merger and acquisition rules for the telecom industry mandate that the company must pay the difference between the entry fee and the market determined price for the spectrum it got through the acquisition to the government.