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Airtel May Have to Pay Over Rs. 400 Crore to Merge With Subsidiary ABSL

Airtel May Have to Pay Over Rs. 400 Crore to Merge With Subsidiary ABSL

By Press Trust of India | Updated: 30 May 2014 11:37 IST

Telecom major Airtel may have to pay over Rs. 400 crores as migration fee and bank guarantee of one-time spectrum fee to merge with its subsidiary Airtel Broadband Services Ltd, which holds 4G spectrum.

"Airtel will have to pay Rs. 406.09 crores equal to the difference between entry fee for UASL of Delhi, Haryana, Kerala and Mumbai service areas, and entry fee paid for merger of Internet licence holding BWA spectrum with UASL for respective service areas," an official source said.

Airtel has applied for amalgamation of ABSL, which holds wireless broadband spectrum that can be used for 4G services, in four service areas of Delhi, Mumbai, Haryana and Kerala.

ABSL holds internet service provider licence while Airtel holds old telecom Unified Access Service Licence that allows company to provide all kind of telecom services. Government issued these earlier with spectrum for about Rs. 1,658 crores.

At present government issues Unified Licences which does not comes along with spectrum but allows a company to provide all kind of telecom services as per infrastructure it owns.

Airtel will be able to provide voice call service using spectrum held by ABSL after amalgamation, the source said. When contacted, an Airtel spokesperson declined to comment.

However, a company source said that it already has UASL licence while migration fee is for those firms who don't have it. "Payment for migration will amount to duplication of fees," the company source said.

Earlier, Mukesh Ambani led Reliance Jio Infocomm had to pay about Rs. 1,673 crores for migrating from ISP licence to Unified Licence that allows it to provide voice call service.

The official source said that Airtel will also have to deposit a bank guarantee of amount equivalent to one-time spectrum fee asked by government for Delhi, Mumbai, Kerala and Haryana.

DoT has asked Airtel to pay total of Rs. 5,201 crores as one-time spectrum fee for spectrum it was allocated beyond 4.4MHz issued with UASL.

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