Loop, Bharti deal in limbo as Trai invokes MNP clauses
15 Oct 2014
A desperate Loop Mobile has offered to limit its agreement with Bharti Airtel to mere transfer of subscribers after the Telecom Regulatory Authority of India (Trai) invoked mobile number portability regulations to throw a spanner in the sale of its assets to Bharti Airtel.
Trai is worried that the sale, which also involves transfer of subscribers, will cause a revenue loss to the government.
For the telecom department, an MNP would have brought revenues while a sale deal that also involves transfer of subscriber base would not fetch the MNP revenue. Trai, therefore, wants subscribers to be ported to Bharti rather than being transferred as a part of the deal.
But, then, a sale also brings revenue to the exchequer in the form of transfer charges and revenue share that Loop would have otherwise paid in relation to the transfer.
Sandip Basu, managing director of Loop Mobile, is reported to have sought an early clearance of the deal. In a letter to the DoT, Loop mobile, which operates only in Mumbai, said the company was offering to change the contours of the deal for an urgent nod.
Over six months have lapsed since the signing of the initial strategic agreement in mid-February, and there wasn't enough time for it to transfer its network equipment before its permit to operate services expires on 29 November.
The initial deal, approval for which was sought on 10 March, involved transfer of Loop's 3 million subscribers and 2G network comprising over 2,500 cell sites and optic fibre through a slump sale without assigning values to individual assets in Mumbai to Bharti Airtel.
Meanwhile, Mumbai's top telco Vodafone is reported to have entered the fray for Loop subscribers with constant calls to join its network. ''Join Vodafone without changing your number. SMS PORT space MOBILE NUMBER to 1900 and visit your nearest Vodafone store,'' is the constant refrain.
Meanwhile, the basic industry MNP data shows that in the last nine months (January-September 2014), more than 45 per cent of Loop customers have ported to Vodafone. In fact, Vodafone has been running a campaign in Mumbai over the last few weeks, offering MNP at the customer's doorstep.
Now, if there are no subscribers left, or only a fraction of them would be left before 29 November 2014, then what exactly is Bharti Airtel gaining from buying from Loop Mobile?
As things stand today, money has not changed hands and the deal is in a limbo.
