Reliance Communications has opposed any change in the existing crossholding norms under the telecom licence on grounds that it will tantamount to changing the rules of the game midway.
RCom has said that it will be forced to close down operations in six circles if the rules are changed. Under the existing policy, a telecom company is allowed to own up to 10 per cent stake in another telecom firm operating in the same circle. However, there is a proposal to do away with this rule and disallow any form of crossholding.
If this rule is finalised by the Telecom Ministry then RCom will have to close services in six circles where it operates under a different company Reliance Telecom. In these six circles, the Anil Ambani Group has crossholding in two different entities — RCom and Reliance Telecom. Reliance Communications in a letter to Telecom Minister Kapil Sibal has said that DoT’s proposal on removing exemption given on cross holding norms, if implemented, “will tantamount to closing operations of Reliance Telecom.” The company has asked the Ministry to put the proposed change in abeyance as it was against the TRAI recommendations.