Airtel May Have to Pay Rs. 436 Crore to Merge With Former Qualcomm 4G Arm

Telecom major Bharti Airtel may have to cough up Rs. 436 crore for merging Airtel Broadband Services with itself towards differential spectrum cost and migration fee, DoT sources said.

Airtel Broadband Services (ABS), formerly Wireless Business Services Private Limited - a telecom company founded US chip maker Qualcomm - was acquired by Airtel last year.

The DoT sources said the 2013 deal is resulting in a merger which is leading to migration of a licence meant for only Internet services to another type of permit that allows use of spectrum for all kinds of telecom services and not just Internet.

ABS holds broadband wireless access spectrum in four service areas - Delhi, Mumbai, Kerala and Haryana, that can be used for 4G services. The company has Internet service provider licence.

Airtel is now moving from its present permit called Unified Access Service Licence (UASL) to new licence which is called Unified Licence (UL) and can provide all kind of telecom services, having no objection from security agencies, under this permit with resources and infrastructure it has.

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"The Access Services division of the DoT has deemed the proposed merger of ISP holding BWA spectrum with UASL licencee as equivalent to migration of ISP with BWA to UL with authorisation to use BWA for voice service," the source said.

Bharti Airtel declined to comment on the matter.

"Taking into account the extant balance period of ISP licence and the entry fee payable for UASL in the 4 service areas where ABS holds BWA spectrum, amount payable has been assessed at Rs. 436 crore," the source said.

The access division of DoT is learnt to have calculated latest price of BWA spectrum held by ABS on the basis of prime lending rate of SBI as the company had acquired airwaves in 2010 and auction determined rates are valid for one year only.

"The amount of Rs. 436 crore is difference between entry fee and market price," the source said.

Reliance Jio Infocomm, which holds pan-India BWA spectrum, had to pay about Rs. 1,673 crore for migrating from ISP licence to UL last year. It is now free to use its BWA spectrum for all kind of telecom services.