Indian mobile operator Idea Cellular could be fined and lose its 3G spectrum and multiple GSM licences, if allegations that it broke M&A rules are true, according to reports.
Accusing the company of breaking these rules – prohibiting M&A within three…
Indian mobile operator Idea Cellular could be fined and lose its 3G spectrum and multiple GSM licences, if allegations that it broke M&A rules are true, according to reports.
Accusing the company of breaking these rules – prohibiting M&A within three years of licences being granted – in its 2008 acquisition of a 41.1% stake in rival Spice Telecom, the Additional Solicitor General (ASG) suggested that the Department of Telecom (DoT) fine the company Rs300 crore (US$66m).
Idea, for its part, told CNBC-TV18, that it had written to the DoT 20 times in the last 30 months to inform it of the two companies’ overlapping licences, but had yet to receive a response. Adding that it had already paid a Rs843 crore charge in connection with the overlapping licences, it said: “No licence condition has remotely been breached.” The television station commented that the merger had received High Court approval, meaning that the ASG’s proposals might not have sufficient legal grounding.
“The Idea and Spice merger, since approved by the courts, happened to involve six overlapping licenses. Despite being issued spectrum for five of these, it is Idea which advised the DoT that it was not using such spectrum; in effect, placing overlapping licenses in a de facto escrow pending receipt of the DoT’s formal letter of merger, including surrender, if at all that was attracted,” Idea Cellular said in a public statement.
Idea and Spice each have licences in six circles: Delhi, Maharashtra, Andhra Pradesh, Haryana, Punjab and Karnataka.
