Reliance Communications (RCOM) has opposed the changes proposed by the government in existing crossholding norms. At present, a telecom company is allowed to own up to 10 per cent stake in another telecom firm operating in the same circle. However, the Department of Telecommunications has suggested changes in the existing policy which includes disallowing any form of crossholding by a service provider in another telecom firm.
In a communication to Kapil Sibal, minister of communications and IT, RCOM has said that the proposed changes in the cross holding pattern would result in the operator shutting down services in six circles. At present, RCOM operates as Reliance Telecom in a few circles. In six circles, the Anil Ambani Group has crossholding in two different entities – RCOM and Reliance Telecom.
RCOM has added that if DoT’s proposal regarding the removal of exemption provided on cross holding norms is implemented would be in violation of the recommendations made by the Telecom Regulatory Authority of India.
