Business

Tata Teleservices gets Rs8,000-cr govt bill to rescue its phone deal

Plans to sell mobile phone business to Bharti Airtel.

Mumbai: Tata Group may have to pay around 90 billion rupees ($1.3 billion) in dues to the government to rescue the proposed sale of its mobile-phone business to Bharti Airtel Ltd., people familiar with the matter said.

According to Bloomberg report, the department of telecommunications is demanding that Tata Teleservices Ltd. clear any obligations to the government before it approves the deal that was struck in October, the people said, asking not to be identified as the information isn’t public. Bharti Airtel, helmed by billionaire Sunil Mittal, is unlikely to agree to pay the sum, two of the people said.

Selling its indebted loss-making carrier will ease Tata’s exit from a sector that’s been ravaged by a scathing tariff war, escalated by the entry of Reliance Jio.

Fluid situation

The situation is fluid, and the amount of the dues could change, according to the people with knowledge of the matter.
Tata Group has been urging the telecom ministry to reduce the amount it’s asking for, one of the people said.
The $100 billion coffee-to-cars conglomerate is also preparing contingency plans to wind down the business in the worst-case scenario, another person said.

Similar demands

The department of telecommunications has raised similar demands for nearly all the deals underway in India’s wireless sector.
The ministry sought 72.5 billion rupees of dues before signing off on the merger of Vodafone Group local unit with Idea Cellular, which will create India’s No 1 wireless carrier overtaking Bharti Airtel. The carriers paid the sum under protest last month.

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