Loop licence may be terminated over dues

Less than a month after telecom major Bharti Airtel signed a definitive agreement with Loop Mobile to acquire its 40 lakh highnet worth subscribers and its network in Mumbai, the Department of Telecommunications ( DoT) has said that it could terminate Loop's licence if it does not pay Rs 682 crore as one- time spectrum fees and spectrum usage charges ( SUC) by month- end.

DoT has given 15- day deadline for payment failing which "necessary action, including termination of licence," could be initiated against Loop.

The government has estimated that Khaitan Group's telecom companies Loop Mobile and Loop Telecom owe about Rs 808 crore in spectrum and other charges to DoT, which is likely to start recovery proceedings soon.

More than Rs 75.67 crore SUC and one- time spectrum fees of Rs606.72 crore are outstanding against Loop. Over Rs 2.04 crore SUC and additional Rs 124.18 crore as reserve price have to be paid by Loop Telecom under a Supreme Court ( SC) direction, an official source told news agency PTI. A DoT official said this could spell trouble for Airtel. On February 18, Airtel had announced the Rs 700- crore acquisition of Loop, which operates only in the Mumbai telecom circle.

In a letter dated July 15, DoT said, " Loop Mobile India has been informed that action in terms of agreement shall follow in case of non- payment of dues. The licencee ( Loop Mobile) has not given any representation against the demands. No FBG ( financial bank guarantee is available with the department to recover the dues. All the available resources to recover the dues have already been exhausted. In view of this … necessary action, including termination of licence if required, to recover the dues may be taken." DoT further stated that the licences held by Loop were quashed by Supreme Court ( SC) on February 2, 2012, and subsequently the operator shut down services from June 1 that year.

" Since Loop did not participate in the spectrum auction held in February this year, licences held by it has already been quashed on June 1, 2012," DoT added.

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