?
An internal review committee set up by the Department of Telecommunications (DoT) has upheld an earlier decision to impose a penalty of Rs 6 billion on Idea Cellular for the alleged violation of licencing norms while merging operations with Spice Telecom
The matter dates back to 2008 when Idea Cellular acquired Spice Telecom?s operations, including the licences held by the latter in six circles. At the time, Spice telecom was offering services in the Punjab and Karnataka circles. Idea Cellular too had licences for the six circles and held spectrum in five circles, including Punjab and Karnataka. The overlapping of licences was the major issue since as per the licencing rules, an operator cannot own stake exceeding 10 per cent in another operator in the same circle.
Aiming to resolve the issue, Idea Cellular had, in 2008 approached DoT with a proposal to surrender the overlapping licences. However, DoT took the matter to the Delhi High Court which stayed the merger between Idea Cellular and Spice Telecom. According to the Additional Solicitor General of India Idea Cellular violated the lock-in period clause, which stipulates that a company cannot undertake a merger deal for three years from the date of issue of the licences. In this matter, new licences were awarded to Spice Telecom and Idea Cellular on January 25, 2008. Therefore, the two companies could not have merged operations until January 2011.
