Ask users to shift provisionally, DoT directs Aircel

NEW DELHI: The telecom department (DoT) has instructed Aircel to send text messages to its customers telling them to ‘provisionally’ switch to other operators if they want to continue their mobile services in case the Supreme Court passes an order cancelling the airwaves allocated to the carrier in 2006.
A person familiar with the matter said that Aircel, which fears large scale churn of its subscribers if such SMSes were sent, has written back to the DoT, saying it was too premature for DoT to take action or for the telco to be sending such a message, and that they should wait till the next hearing on February 3 or till a final order is passed.

The DoT directive could cast a further shadow on the proposed merger between Aircel and Reliance Communications as well as on the latter’s deal to sell its tower business to Brookfield. A reduction in nearly 45% of Aircel’s subscriber base will impact the valuations of both transactions.

“Aircel/ Dishnet Wireless is hereby directed to take necessary action well in advance to inform all existing subscribers through SMS to avail the mobile number portability (MNP) facility provisionally for continuity of their mobile service, in case the Supreme Court passes the proposed order, to avoid any inconvenience,” the DoT has said in a letter dated January 18 to the telecom services provider, and posted on its website.

The DoT has also asked its relevant wing to put out “suitable advertisements” in the matter.

Aircel, in response, has asked the DoT not to issue such advertisements till the next hearing. It further asked the telecom department to remove the letter from its website, saying it was creating “doubts/panic” among its subscribers and vendor partners, and hurting the telco’s business.

The apex court on January 6 had warned that it would cancel Aircel’s spectrum and licence in 14 circles if two executives from parent - Malaysia's Maxis Berhad, which owns 74 per cent in the Indian company - do not appear in a lower court within two weeks in the CBI case against former telecom minister Dayanidhi.

The two-week period expired on Friday but Maxis owner T Ananda Krishnan and former Maxis director Augustus Ralph Marshall, have not appeared before the court so far.

The top court also asked the DoT to look for an alternative service provider for Aircel’s nearly 91 million subscribers. DoT could even think of auctioning the spectrum, it suggested.

Aircel has 91 million subscribers in all, out of which over 38 million fall in the 14 circles that were granted 2G airwaves in 2006. The company also offers 3G services in six of the 14 circles, which can continue uninterrupted.

But the SMSes will go to all the subscribers in the circles, leading to a potential flight of all its subscribers to its competitors.

“The DoT communication is damaging to the deal, business and to the whole debt of Aircel. Ideally, something like this should be done once a final order comes, as this will only create more restlessness among consumers," said Prashant Singhal, global telecom lead at EY.

The DoT directive does not mention the exact date from which Aircel must begin informing customers, but adds that the MNP facility can be exercised by subscribers provisionally.

“As the restraint of use of 2G spectrum (licenses whereof were originally granted to Aircel in November 2006), would entail adverse consequences to subscribers, this ministry has been directed by Hon Supreme Court to devices ways and means whereby earlier subscribers (of 2G spectrum licenses, granted in favour of Aircel) can be transferred provisionally, to some other service provider, in case the necessity to pass the proposed order arises,” DoT added.

The Ananda Krishnan case relates to former telecom minister Dayanidhi Maran allegedly coercing promoter C Sivasankaran to sell his stake in Aircel to Maxis in 2006 as part of a quid pro quo in the form of bribes. The Central Bureau of Investigation (CBI) filed a chargesheet on the matter in October 2014. Aircel was granted telecom service licenses in 14 circles including Delhi, Mumbai, Kolkata, Andhra Pradesh, Kerala, Punjab, Rajasthan, MP, Gujarat, Haryana and Karnataka, in 2006.

Aircel is set to file an appeal in the Supreme Court early next week, seeking to be heard as it was not a party to the ongoing case. A State Bank of India-led consortium of lenders has approached the attorney general’s office to make an application to the Supreme Court to leave Aircel out of the corruption charges against its promoters.

Nearly `30,000 crore debt becoming unserviceable is at stake, if the apex court cancels the license and forces migration of Aircel customers.

“Aircel was not a party to the proceedings pending before the Supreme Court,” a company spokesperson said, adding that it was seeking legal advice on the effects of the orders passed by the Supreme Court. “As it currently stands, the business and operation of the company are continuing as usual,” added the spokesperson.