Essar files for telecom licence under BPL's name

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A CNBC-TV18's exclusive news report finds out that Essar has filed for a nationwide telecom licence under BPL's name.

Essar has filed for a telecom licence under the name ShippingStop.com, which is a fully owned subsidiary of BPL Mobile .

Essar is a 33% partner in Vodafone Essar. Essar has, through another entity BPL, applied for a nationwide licence. It would seem to be a situation of conflict, with the existing business of Vodafone Essar, which is the third largest telecom player in this country and a disturbing development for Vodafone.

 

It is understood that late Thursday evening, Essar applied for a nationwide telecom licence via a company by the name of ShippingStop.com. It is a fully owned subsidiary by BPL.

 

It may be recalled that a few years ago when Rajiv Chandrashekhar, the original founder promoter of BPL sold out to Essar. At that time, because Essar was invested in Hutch Essar, it had directly invested 9.9% in BPL and the rest of it was owned by a series of funds, some of which are said to be close associates of Essar. So, analysts said that this might be a disturbing situation for Vodafone.

 

The history that Vodafone and Essar have shared, especially when Vodafone was taking over Hutch's stake, Essar was not an easy partner to deal with. This can only make things a little more difficult between Vodafone and Essar.

 

Analysts are wondering if there is a conflict clause between Vodafone and Essar in their shareholders agreement.   

 

The management of Essar has confirmed the filing of an application for a licence, but they refused to comment on the reasons. Asim Ghosh, Head of Vodafone Essar, was also contacted and he had no comment to make on the matter.

 

Essar already has close to 33% in one major operator and if it files for another licence, it might be a regulatory issue. There is a slightly confusing situation on this, added analysts.

 

Earlier, BPL Mobile was a disputed property between Essar and Hutch, and now Vodafone, because the company was meant to be sold to the combined Hutch Essar (now Vodafone Essar), except that there were complications that developed between two partners and eventually it never did get sold.      

 

Now, the entire issue of the ownership of BPL is under arbitration. A few months ago, analysts said that it believed that BPL would never be merged into Vodafone Essar, because regulations did not allow for the spectrum transfer. If you could not transfer the spectrum from BPL to Vodafone Essar, then the whole purchase might have been redundant. They thought that maybe Essar would go ahead and try and sell BPL separately, to someone who may want presence in the Mumbai market. The BPL circle is only about the Mumbai market.

 

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