Reliance Jio’s spectrum trade deal with RCom failed, sharing continues

Reliance Jio had signed a spectrum trading as well as sharing deal with Reliance Communications in January 2016, but while the former failed in 2018, the latter continues.

Different set of guidelines govern spectrum trading and sharing. In trading, spectrum is bought from a telecom player and the seller clears all dues at the time of sale. Dues after the date of sale becomes a liability to the buyer, but if any past dues arise at a future date, the DoT is free to recover it from either party or from both. The parties must provide an undertaking to this effect and only then the deal is approved by the DoT.

Under spectrum sharing pact, the parties only pay usage charges, which Jio has been paying from the date it entered the deal. There is no clause relating to payment of past dues or any undertaking to this effect in a sharing deal. Jio has cleared its own AGR dues of Rs 198 crore, which, it said, also includes the AGR dues of Rcomm for the eight circles for which it bought spectrum from the latter. But this due has been paid from the date of the pact, that is January 2016, not prior to it. The total AGR dues of Rcomm stands at Rs 25,194.58 crore.