Page 115 - SAMENA Trends - August 2020

REGULATORY & POLICY UPDATES SAMENA TRENDS

TRAI also suggested government guidelines require was the cause for the insolvency filing. As previously
spectrum-sharing agreements to include an exit reported by TeleGeography’s CommsUpdate, RCOM’s
clause allowing either party to terminate an existing asset monetization plans were blocked by its dispute
arrangement. The recommendations come days after with Ericsson, restricting its capacity to raise funds.
the country’s Supreme Court said Reliance Jio must The company’s chairman Anil Ambani only narrowly
pay Reliance Communications’ (Rcom) AGR fees avoided a jail sentence for contempt of court for failing
since it has been using the now defunct operator’s to pay the vendor when his brother Mukesh Ambani –
spectrum since 2016. Rcom is undergoing bankruptcy the chairman of Reliance Industries Limited (RIL) and
proceedings. Jio, which filed an affidavit with the court one of the world’s richest men – paid the dues on his
today, said it is not liable for Rcom’s AGR fees, arguing behalf in March 2019. RCOM’s AGR dues were most-
the spectrum-sharing deal is not connected with AGR recently pegged at INR310 billion (USD4.1 billion),
liability. (August 17, 2020) mobileworldlive.com and the company owes around INR490 billion to its
creditors. The apex court questioned the potential sale
The Supreme Court has demanded that the Department of the spectrum holdings by the bankrupt providers,
of Telecommunications (DoT) explain how it expects to seemingly unaware of the DoT’s continued efforts
recover dues related to the Adjusted Gross Revenue to prevent such transactions. The DoT has taken the
(AGR) case from bankrupt providers Aircel and Reliance stance that the license holders do not have the right
Communications (RCOM. The court had previously to sell the spectrum, as it is national property. Aircel
stated that it suspected the two companies had and RCOM have argued that they own rights, which
declared bankruptcy to avoid paying the dues, despite are transferable, and as such are authorized to sell
both doing so long before the October 2019 ruling on the frequencies. The duo have also highlighted that
AGR. Nevertheless, the bench was cited as saying the spectrum resources are both companies’ key
that it intended to look more closely at the cause of assets. The telcos’ position was upheld by the National
the initiation of insolvency for the companies, and their Company Law Tribunal (NCLT) and the National
liabilities. The court highlighted the fact that RCOM Company Law Appellate Tribunal (NCLAT), but the DoT
had already settled its dispute with vendor partner has filed an appeal before the Supreme Court, which is
Ericsson prior to the insolvency filing, RCOM having currently pending.
previously stated that its legal battle with Ericsson (August 11, 2020) The Economic Times

Italy’s government has green-lighted a proposal to thanks to its existing involvement in the Flash Fiber
create a single broadband network company which will joint venture which has been deploying fiber-to-the-
now be presented in a Memorandum of Understanding home (FTTH) networks across Italy.
(MoU) to incumbent operator Telecom Italia (TIM). (August 28, 2020) reuters.com
Italy State investment fund Cassa Depositi e Prestiti (CDP) The Italian government has reportedly approved a
has been at the heart of negotiations to merge TIM
with wholesale broadband operator Open Fiber; CDP move by Telecom Italia (TIM) to sell a stake in its last-
owns 50% of Open Fiber and has a minority stake in mile networks business FiberCop to US investment firm
TIM. According to a report, which cites several local KKR. KKR has offered EUR1.8 billion (USD2.1 billion)
newspapers, the plan put forward by CDP and approved for a 37.5% interest in FiberCop and La Repubblica
by the government will restrict TIM’s control of the unit writes that, following the government green light, TIM’s
while still giving it majority ownership. TIM is known to board is expected to vote on 31 August to push the
favor retaining control of the merged unit, while Open deal through. The Rome government is still trying to
Fiber wants an open access broadband provider which help negotiate a tie-up between TIM and wholesale
is wholly independent of TIM. Daily La Stampa said a network operator Open Fiber, which would lead to the
strong state presence would be guaranteed thanks to creation of a single national broadband network. An
CDP, and TIM would not be allowed a majority of board agreement has not yet been reached as the various
members in the future network. Meanwhile, TIM is also parties have different views on the future ownership
discussing the future of secondary, or last mile, copper and governance of the business, with TIM looking to
and fiber networks business, which it has dubbed retain control but politicians favoring an independent
FiberCop. Following on from news that the government unit. (August 27, 2020) La Repubblica
has approved plans to sell a 37.5% stake in FiberCop
to US investment fund KKR, TIM has now signed a Italian cellco Iliad has been granted an eight-year
MoU with Italian ISP Tiscali which could pave the way extension of its 900MHz license which was due to
for its participation in the project. Another broadband expire at the end of 2021. Telecoms regulator AGCOM
provider, Fastweb, is already taking a stake in FiberCop has agreed to extend its permit to end-2029 after

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