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Policy & Regulation
DoT to seek law ministry opinion on Bharti-Loop Deal
TT Exclusive |  New Delhi |  13 Aug 2014

Uncertainty still looms over the fate of 2.9 million subscribers of Loop mobile in Mumbai telecom circle as the Bharti Airtel – Loop deal awaits clearance from the Department of Telecommunications (DoT).
 
TT has come to know that the DoT will now seek Law ministry’s opinion on the deal. It wants clarification whether slump sale in this case is permitted or not. As per license conditions, it is not possible to transfer subscribers of an operator to another operator.
 
Telecom regulatory authority of India (TRAI) has already objected to the transfer of customers to other licensee. TRAI has earlier shot a letter to DoT objecting the contours of the deal. TRAI in its letter has said “On examination of the proposal of M/S Loop, the Authority is of the opinion that the proposed transfer will be against the present licensing terms and conditions and will also contravene the Telecommunications Mobile Number Portability Regulations 2009 (MNP)”.
 
TRAI has also said “Such an agreement also undermines the spirit of merger and acquisition guidelines. Therefore, the proposed transaction does not appear to be in line with the existing regulatory and licensing framework.”
 
Loop’s proposal to transfer its subscribers to Airtel violates the spirit of the MNP regulations regarding freedom to a subscriber to choose network of its choice and it will also results in revenue loss to government. Further TRAI had also asked DoT that in case they don’t allow this deal they need to issue directive to customers to port 120 days before the expiry of loop telecom license. Till now department of telecom has not been able to decide whether this deal is permitted.  If department of telecom takes more time in deciding the deal it will be a loss to customers, they won’t be able to port to their choice of network on time.
 
In February, Bharti Airtel had announced acquisition of Loop Mobile for Rs.700 crore. As part of the deal, Loop would transfer its subscribers and all active infrastructure, approvals and licences to bharti airtel. This includes Loop’s 2.9 million subscribers in Mumbai and 2,500-plus cell sites.

    
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13 Aug 2014(IST)  
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