Cabinet approves transfer of telecom service licenses

Second, FCR the past dues, it will be made as a condition precedent that all the past dues till the date of transfer will have to be cleared before transfer of license is allowed. The transferee will be liable for the dues arising after the date of transfer and therefore the set-off clause will operate accordingly.

Finally, the provisions of provisions of Section 391-394 of the Companies Act, 1956, are required to be complied with for the demerger of a company and the transfer of license could be part of a demerger scheme. The government decision has been taken on the demand of industry, Swaraj said. There are several instances where telecom companies belonging to the same group — for example, Reliance and Bharti — have licences for different services. These operators said they wanted to manage the operations more efficiently. If they are permitted to separate their cellular and basic service operations under different entities, they would be able to operate in a more efficient manner. The suggestions of industry were considered by a group of ministers under the finance minister. The government felt in line with global trends, consolidation of particular services under separate entities would help the operators, Swaraj said.