DoT approves Bharti Airtel and Telenor India merger

The telecom department Monday approved the merger of Norwegian telecom major’s India arm – Telenor India – with India’s leading carrier Bharti Airtel.

In a notification dated May 14, the telecom department has transferred all licenses belonging to Telenor India, and its liabilities to Bharti Airtel as well.

“The present merger is taken on record without prejudice to the rights, contentions, remedies and steps which may be taken by the department, in pursuance of any subsequent orders of any orders, judgements and decisions of Hon’ble courts and tribunals in related pending matters,” the department said in its notification.

The move follows the decision of the Supreme Court last week where it quashed the telecom department’s bid to make Bharti Airtel furnish a bank guarantee of Rs 1,499 crore as a pre-condition to approving the mobile phone operator’s buyout of Telenor India, paving the way for the deal to go through.

The apex court had dismissed the Department of Telecommunications (DoT) plea against Telecom Disputes Settlement and Appellate Tribunal’s (TDSAT) April 12 interim order that directed DoT to clear Airtel’s buy out of the India arm of Norway’s Telenor, without requiring the Indian telco to furnish the bank guarantee.

The telecom department was seeking a bank guarantee from Airtel equal to Rs 1,499 crore for one-time charges for spectrum (OTSC) allocated to the carrier without auctions, and over Rs 200 crore for deferred payment for airwaves owed by Telenor, before approving the deal. Airtel had moved TDSAT against the DoT’s demand of OTSC – having paid up the Rs 200-crore due on Telenor India’s airwaves – saying the issue of one-time spectrum charges was still in courts.

Post the deal approval, Airtel will buy Telenor India in a no-cash deal and take over its outstanding spectrum payments of Rs 1,650 crore. The deal will help it narrow the revenue and subscriber market share gap with the emerging Vodafone India-Idea Cellular combine, which will become the country’s largest phone company after their own merger.

Airtel will get Telenor India’s 4G airwaves in Andhra Pradesh, Bihar, Maharashtra, Gujarat, Uttar Pradesh (East and West) and Assam, besides operational contracts, tower leases and about 40 million subscribers as of January. Telenor hasn’t started operations in Assam.

The Competition Commission of India, Securities & Exchange Board of India, the stock exchanges and National Company Law Tribunal have already approved the acquisition.