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Last Updated : Nov 08, 2018 01:18 PM IST | Source:

Tata Sons may pay large part of Tata Teleservices unit's dues

Airtel had informed the DoT two weeks ago that it would take care of the payment, including licence fee, spectrum usage charge, and one-time spectrum charge

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Tata Sons may pay a major chunk of the Rs 10,000 crore dues of Tata Teleservices (TTSL) unit to the government, The Economic Times reported.

The move comes after Bharti Airtel, which is buying TTSL’s mobility business, has formally assumed responsibility to clear the dues, sources told the paper.

Airtel and TTSL had informed the Department of Telecommunications (DoT) two weeks ago that the former would take care of payment, including licence fee, spectrum usage charge and one-time spectrum fee, the report said.


DoT officials had asked the two companies to clearly state the contours of the sale so that it could identify which entity would be responsible for the liabilities.

"We will only deal with the licence holder and therefore we will want our dues either from Airtel or TTSL," a DoT official told the paper, adding that the money may come from Tata Sons as the company is selling TTSL's mobility business on a cash-free, debt-free basis.

Top executives at Tata Sons told the paper that Airtel would not pick up any other costs. Earlier, Airtel had agreed to assume a small portion (around Rs 1,500-2,000 crore) of the unpaid spectrum liability of Tata Teleservices.

"Airtel is most likely to seek an ironclad guarantee from Tata Sons that they (the Tatas) will fund them," a top Tata Group executive told the paper.

The two companies need DoT’s approval to finalise the deal.

Tata Sons has been keen to seal the deal as it wants to get rid of its bleeding mobility business. The company is also finalising the sale of TTSL’s enterprise business to Tata Communications.

In October last year, Bharti Airtel said it would absorb Tata's consumer mobile business in 19 circles (17 under TTSL and two under Tata Teleservices Maharashtra) to boost its revenue, customer base and give access to 4G airwaves in the 850 MHz band.

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First Published on Nov 8, 2018 01:18 pm
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