RCom awaits for spectrum guidelines to sell tower biz

New Delhi: Reliance Communications today said it is in talks with several potential investors for selling its tower unit but a deal can be finalised after clarity on spectrum guidelines.

“We continue to engage with potential investors in order to complete the transaction and DoT and Trai are working on issues related with spectrum auctions and licensing guidelines,” Reliance Communications (RCom) president Punit Garg said on an analyst call.[caption id=“attachment_323891” align=“alignleft” width=“380” caption=“Ready to sell. Reuters”]  [/caption]

He added that once clarity emerges on various pending regulatory issues, then transaction will proceed further.

RCom, the country’s second largest telecom operator, has been exploring various routes of raising funds, including selling stake in telecom tower arm Reliance Infratel, a move that will help it retire a major chunk of debt on its books.

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As of 31 March 2012, RCom has a net debt of over Rs 35,839 crore.

According to reports, the company is also in talks with US-based firms Blackstone and Carlyle for stake sale but a deal is yet to be finalised.

Telecom regulator Trai has recently come out with its recommendations on auction of spectrum and other related issues.

“We are constructively engaged in the consultation process and we do hope that the outcome is going to be forward looking and positive for both, the consumer and the telecom sector. We look forward for a level-playing field with equality for all operators and thus removing distortions in various areas in the past,” Garg said.

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Despite pressure from the industry, Telecom Regulatory Authority of India (Trai) has stood by its recommendations of a base price of Rs 3,622 crore per megahertz (MHz) pan-India spectrum for 1800 Mhz band (being used for GSM service).

This is almost 10 times higher than the price at which 2G licences bundled with 4.4 MHz spectrum were allocated in 2008 by then Telecom Minister A Raja.

However, Trai gave some concession to CDMA operators slashing the reserve price of 800 MHz spectrum (which they use to offer services) at 1.3 times the 1800 MHz reserve price, from two times proposed earlier.

Also, another recommendation which could impact Reliance Infratel is that telecom infrastructure providers be brought under the net of ‘Unified Licence’, which would mean that would they pay eight per cent of revenue as annual licence fee.

At present, infrastructure players (IP-1), are only required to register with Department of Telecom (DoT) and do not have to pay any licence fee.

PTI