Jio-RCom spectrum sharing deal not connected with AGR liability: Sources

A Supreme Court bench had on Friday sought to know why Reliance Jio Infocomm Ltd (RJIL) must not pay adjusted gross revenue (AGR) dues of Reliance Communications since it has been using the latter’s spectrum since 2016.

Reliance Jio’s four-year-old telecom spectrum sharing deal with Reliance Communications (RCom) is not connected with the latter’s past statutory dues that pertain to the period prior to 2016 when Jio wasn’t even in operation, sources close to the company said.

A Supreme Court bench had on Friday sought to know why Reliance Jio Infocomm Ltd (RJIL) must not pay adjusted gross revenue (AGR) dues of Reliance Communications since it has been using the latter’s spectrum since 2016.

A source, refusing to be quoted as the matter is sub-judice, said RJIL in April 2016 entered into a pact to share a part of the spectrum held by RCom and its unit Reliance Telecom Ltd (RTL).

The shared spectrum was limited to the 800 MHz band and was strictly in accordance with the Department of Telecom’s (DoT) spectrum sharing guidelines. RCom’s 2G, 3G and 4G spectrum in 1,800 MHz band are not being shared.

The AGR dues of RCom and RTL are in no manner connected with this shared spectrum, the source said, adding that the AGR has been paid by both RCom/RTL and RJIL on the revenue generated from the shared spectrum.

The AGR dues related to 2G/3G business of RCom/RTL which it was carrying out prior to 2016, the time when RJIL was not even operational, the source said.

Not just RJIL, even Airtel had bought Aircel’s 4G airwaves in the 2,300 MHz band and Videocon’s 4G spectrum in the 1,800 MHz band through the spectrum trading route in 2016.

The source said the quantum of spectrum used by RJIL is around 38 per cent of the total spectrum currently held by RCom. RCom continues to hold spectrum in 900 MHz band, 1,800 MHz band, and 2100 MHz, which is not being shared with RJIL.

Over 85 per cent of the value of the shared spectrum has been already fully paid and realised by the government.

Moreover, the right to use 85 per cent of the shared spectrum value is expiring in July 2021.

Both RJIL and RCom continue to discharge in full their statutory liabilities in respect of revenue from the shared spectrum. Further, both the firms continue to pay additional spectrum usage charges to the government towards the spectrum sharing arrangement, sources added.