DoT seeks law ministry view on R-Jio, ITL merger

By: | Published: January 7, 2015 12:19 AM

The department of telecommunications (DoT) has sought the law ministry opinion on the proposed merger...

The department of telecommunications (DoT) has sought the law ministry opinion on the proposed merger of Reliance Jio Infocomm (RJIL) and its long-distance service arm Infotel Telecom (ITL). The merger, through amalgamation, will create a single company.

The Access Service Cell of DoT on December 31 had suggested that the matter be sent to the law ministry for its advice. DoT has sought legal view over the merger and acquisition, the bone of contention where RJIL cannot go ahead with merger plans without DoT’s approval.

According to the new merger and acquisition rules, as per the letter of Access Service Cell of DoT: “It is not mandatory to seek DoT approval before filing scheme of amalgamation in Registrar of Companies, but the Unified licences clearly mentions that scheme of amalgamation should be formulated in such a way that this scheme (merger) should become effective only after the written approval of DoT.”

DoT had also asked RJIL to provide details about the minimum paid-up equity capital as of April 1 for 2012, 2013 and 2014, and net worth of the company in the same period besides clarifying why the matter of second transfer or company Rancore Technologies — another RIL’s subsidiary — which were not brought up in their request for proposed merger.

In February 2014, RJIL had moved the Mumbai High Court, seeking approval to merge the holding company.

RJIL had requested DoT for completing security process after which the gateway can be made operational. The process includes setting up of internet interception and monitoring system and its successful access to the government security agencies under the home ministry.

By merging both entities, RJIL will comply with the Unified Licence to allow it to offer national and international long distance services as well as data services under a single licence.

By not amalgamating both the entities, RJIL could face some delay in the launch of its services.

Infotel Telecom owns licences to offer national long distance and international long distance services, while Jio has licences to offer high speed data and voice services across India through airwaves in the 2300 MHz band. It also recently won spectrum in the 1800 MHz band in 14 circles, through which it can offer voice as well.

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