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Indian operator Reliance Communications has made a partial payment of $18.6m to Ericsson in an effort to defuse their ongoing dispute after the Swedish vendor had called for the imprisonment of its chairman Anil Ambani after the company’s failure to pay the entirety of the services charges owed.
In a statement released by RCom, it confirmed that it had deposited a payment of $18.6 with the Supreme Court registry from operational funds it had at its disposal. In addition to this, it said it was taking all required steps towards enabling a settlement.
The Indian conglomerate also stressed in the statement that it remained fully committed to making the outstanding payment to Ericsson, and said it would be able to do so with the proceeds of a spectrum asset sale to Reliance Jio.
Ericsson is owed $78.5m in unpaid service charges, but the dispute between the pair escalated when RCom failed to settle the service charge on the date it was instructed to by the Supreme Court. In response to this, Ericsson increased the pressure on the Indian firm by filing a second contempt of court case against Anil Ambani, and said he should be detained in civil prison until the outstanding amount is settled.
RCom, which has all but exited the Indian mobile market, missed the original 30 September deadline to make the payment, but was then granted a reprieve until 15 December, a deadline which it also missed.
The company argued it was unable to make the payment in time because of delays by regulator Department of Telecommunications (DoT) in approving its spectrum sale to Reliance Jio, a deal first struck in December 2017. RCom reached a deal to sell off the majority of its mobile assets to Reliance Jio after creditors, including Ericsson, took action against the company over huge debts.
Swedish telecommunications giant Ericsson has called for the detainment of Anil Ambani, the chairman of Indian operator Reliance Communications (RCom) for its failure to pay the vendor a settlement fee of INR5.5bn ($78.5m) of unpaid service charges.
Ericsson was forced to file a second contempt of court proceeding against Reliance Communications when they failed to process the outstanding settlement charge. In addition to this, it was further disclosed that the vendor requested in the petition to the Supreme Court that the chairman of Reliance Communications should be barred from leaving the country and be detained in civil prison. It has also been reported that Ambani provided the Supreme Court with a personal guarantee.
However, RCom has also filed a case against the Department of Telecommunications (DoT) claiming that the delays in approving long-planned spectrum sales and auctions had prevented it from being able to pay Ericsson. The court will hear both cases on the 7th of January.
The former mobile operator missed the original payment deadline of 30 September, and then last month the high court rejected its plea to extend a 15 December deadline, which it had also missed. The earlier extension was granted by the court due to a delay in finalising the sale of its assets to Reliance Jio.
Twelve months ago, RCom brokered a deal with Jio to sell off assets including 800MHz spectrum to repay part of its huge debt. DoT later demanded payment of the dues as a condition for approving the agreement, but RCom is disputing the spectrum charge in court.
DoT last month rejected the spectrum deal on the grounds that it goes against trading guidelines after Jio sought assurances it won’t be held responsible for RCom’s past spectrum-related charges, which could total as much as INR29.5 billion.