Non approval of Loop-Bharti deal to cause loss for govt, banks: Loop CEO

If the government does not approve the proposed transfer of assets of Loop Mobile (India) to Bharti Airtel, it would impact the government exchequer and Indian banks leading to huge loss, the company's managing director and CEO Sandip Basu said in a recent communication to the secretary of the Department of Telecommunications (DoT).

In a letter on October 9, Basu said non-approval of the deal would lead to losses for Indian banks who have extended financing to Loop, as the company does not have the financial ability to repay the loans if the transfer or migration does not complete, and it is required to wind up operations. The matter is on hold for about six months.

Also, Basu noted, non-approval would cause loss to the exchequer in the form of loss of revenue share fee that Loop would have otherwise paid in relation to the transfer or migration consideration, and mobile number portability (MNP) fee that it has earlier offered to pay even though the transfer or migration does not require MNP services.

Further, Basu added that the DoT's demand of about Rs 800 crore is subjudice and the matter is being heard in the TDSAT Loop has agreed to pay according to the final judicial determination, Basu said in his communication.

Besides, Basu said that the company will ensure MNP options for all its subscribers and will also inform them in time as directed by the Telecom Regulatory Authority of India (Trai). The regulator has earlier has objected to the mandatory porting to Airtel, and asked Loop to ensure that subscribers get option to port out to any operator they wish.

Loop Mobile had, in a letter March 10, 2014, informed DoT about its inability to renew its licence due to various commercial reasons and would, therefore, cease to provide its services with effect from November 29.

Early this year, Loop entered into an agreement with Bharti to sell off its assets for Rs 700 crore.