The Law Ministry has said that the ₹700-crore deal between Airtel and Loop can go ahead if there is no ban on a slump sale in the telecom licence conditions.

The DoT has already said that there is no bar on a slump sale under the existing licence conditions. Therefore, the opinion given by the Law Ministry could see the deal going through.

The deal had not been approved after differences cropped up between the Department of Telecom and regulator TRAI on whether an operator’s subscribers could be transferred to another operator without their consent.

In February, Airtel had announced that it would acquire Loop Mobile’s three million subscribers in Mumbai along with its infrastructure, 400 towers.

Service continuity

Loop Mobile’s 20-year licence expires in November and the company was unable to win back spectrum to continue services.

Airtel, on the other hand, won spectrum in Mumbai in the last auction round. The slump-sale deal with Airtel, therefore, came as a relief for Loop subscribers, who were assured of service continuity.

However, regulator TRAI had raised concerns over the transfer of Loop subscribers to Airtel without their consent and said that such a shift could happen only through the Mobile Number Portability system.

Countering TRAI’s observation, Loop said that the deal in fact saved the subscribers from going through the MNP process. In any case, there was no lock-in for any user who wished to move to another operator, it added.

Loop argued that a similar transaction had been allowed when Norway’s Telenor shifted assets and subscribers from its earlier joint venture with Unitech to a new company, Telewings.

Related Topics