Idea Cellular has been slapped Rs.600-crore penalty by the Department of Telecommunications (DoT) for its alleged violation of licence conditions in its merger deal with Spice Communications.
The telecom operator has been asked to pay the amount within the next 15 days to take on record the merger of the operational Spice licences of Punjab and Karnataka in the parent company.
“Idea Cellular has received a communication from DoT, Ministry of Communications and IT, on imposition of financial penalty of Rs.600 crore for alleged violation of terms and conditions of CMTS /UAS licences while acquiring erstwhile Spice Communications,” the mobile operator said in a filing to the BSE.
Co to challenge
Idea Cellular, however, said it was preparing to take necessary steps to challenge the DoT letter at appropriate forum.
As per the rules, a telecom operator cannot hold more than 10 per cent stake in another operator in the same circle. In 2008, Idea Cellular acquired 41.09 per cent stake in Spice Communications. The companies merged in 2010, which resulted in overlapping of licences in six circles.
At the time of the merger, both companies had licences for Andhra Pradesh, Delhi, Haryana, Maharashtra, Punjab and Karnataka.
Meanwhile, the Supreme Court in its February, 2012, order cancelled Idea Cellular’s licences for Punjab and Karnataka circles, while Spice lost its licences for Andhra Pradesh, Delhi, Haryana and Maharashtra.
As a result, only Punjab and Karnataka licences are operational post the merger.
