Idea Cellular has approached the Telecom Disputes Settlement Appellate Tribunal (TDSAT) against a notice issued by the Department of Telecommunications (DoT) to cancel its licence in Punjab for violating merger and acquisition (M&A) norms.
On April 21, 2011, DoT issued a show cause notice to Idea Cellular asking why its licence for the Punjab circle should not be cancelled on violation of M&A norms. The company has also been charged liquidated damages (LD) for not rolling out its services as per the existing norms in the same circle.
Idea has, thus, contended that DoT cannot issue a show cause notice for cancellation of the Unified Access Service Licence (UASL) while it asks the company to pay liquidated damages for failure to roll out its services.
DoT has countered this argument, saying that demanding liquidated damages for failure to roll out services from an existing licensee is a separate matter from the show cause notice for violating the terms of the Unified Access Service Licence.
As per the terms, a licensee is not allowed to merge or amalgamate with any other company for the first three years. It also provides that a person cannot hold 10 per cent or more stake in more than one licence in the same telecom circle or service area.
Idea Cellular has 41.09 per cent stake in Spice Telecommunication since October 17, 2008.
DoT had, on February 24, 2011 imposed a penalty of Rs 0.50 billion on Idea Cellular for not providing requisite information about its merger with Spice Telecom despite several requests.
The Delhi High Court has, in April 2011, stayed the merger of Spice with Idea, which has been challenged by the company.
On January 31, 2011, Idea had moved TDSAT seeking directions to DoT to issue it 3G spectrum in Punjab and Haryana circles, where the allocation has been pending because of Idea?s merger with Spice Telecom.
It also had sought directions to DoT for making necessary amendments in the licence terms so as to make Idea Cellular a licensee of 3G spectrum in Punjab.
