CNBC-TV18''s exclusive news report finds out that Essar has filed for a nationwide
telecom licence under BPL''s name. Essar has filed for a telecom licence under
the name ShippingStop.com, which is a fully owned subsidiary of BPL Mobile.
is a 33-per cent partner in Vodafone-Essar and, through another entity BPL, applied
for a nationwide licence.
would seem to be a situation of conflict, with the existing business of Vodafone-Essar,
which is the third largest telecom player in this country and a disturbing development
It is understood that late Thursday evening, Essar applied
for a nationwide telecom licence through a company by the name of ShippingStop.com,
the fully owned BPL subsidiary.
It may be recalled that a few years ago
when Rajiv Chandrashekhar, the original founder promoter of BPL sold out to Essar.
At that time, because Essar was invested in Hutch Essar, it had directly invested
9.9 per cent in BPL and the rest of it was owned by a series of funds, some of
which are said to be close associates of Essar.
said that this might lead to a conflict clause between Vodafone and Essar in their
shareholders agreement, more so given the history that Vodafone and Essar have
shared, especially when Vodafone acquired Hutch''s stake, as it was not an easy
partner to deal with.
management of Essar has confirmed the filing of an application for a licence,
but it refused to comment on the reasons. Asim Ghosh, head, Vodafone Essar, was
also contacted and he had no comment to make on the matter.
already has close to 33 per cent in one major operator and if it files for another
licence, it might become a regulatory issue.
BPL Mobile was a disputed property between Essar and Hutch, and now Vodafone,
because the company was meant to be sold to the combined Hutch-Essar (now Vodafone-Essar),
except that complications developed between them and eventually it was never sold.
The entire issue of the ownership of BPL is under arbitration. A few
months ago, analysts had said that they believed that BPL would never be merged
into Vodafone-Essar, because regulations did not allow for the spectrum transfer
and therefore, the purchase might become redundant.
was speculated that Essar would go ahead and try and sell BPL separately, to someone
who may want presence in the Mumbai market as the BPL circle is only confined
None of the TRAI recommendations that have come in seem to
suggest that a transfer of this sort can happen without the spectrum having to
be given up. But these are just recommendations, as yet.
far as the shareholding goes, Essar has a 33-per cent in Vodafone-Essar and only
9.9 per cent in BPL as direct holding, making it below the 10 per cent limit,
which may be doubled as per the latest TRAI recommendation. (See: TRAI
doubles operator cross-holdings to 20-per cent for telecom M&As)
the regulator views Essar being a part of two big telecom combines or being part
of Vodafone-Essar and trying to run a nationwide business separately, is something
that will be known once the regulator gives its comment. The application has only
been filed and nothing has been granted as yet.
similar situation had arisen in an earlier case where Tata Telecom had a separate
licence, but was part of IDEA and had to, eventually, divest its stake in IDEA.