According to news reports, Idea Cellular, the government has provided it access to long-disputed licences in the Punjab and Karnataka circle.
The Department of Telecommunications (DoT) has transferred the licences for the two circles to the operator which were originally held by Spice Communications and had been acquired by the former in 2008. Earlier, DoT had imposed a fine of Rs 6 billion on the operator and stalled the licence transfer, on the grounds that the merger deal with Spice Communications was in violation of licencing norms.
However, the licence transfer is subject to the outcome of Idea Cellular?s petition before the Telecom Disputes Settlement and Appellate Tribunal challenging the penalty imposed by DoT on the operator.
The issue dates back to 2008 when Idea Cellular acquired Spice Communication?s operations, including licences held by the latter for six circles, two of which (Punjab and Karnataka) were commercially operational. Meanwhile, Idea Cellular, too, held licences for all of those six circles and had spectrum in five, including Punjab and Karnataka.
This overlap of licence areas was the subject of dispute since under the licencing rules an operator could not own a stake exceeding 10 per cent in another operator in the same circle. However, Idea Cellular held DoT responsible for delaying the resolution of the issue despite the operator?s offer to unconditionally surrender the overlapping licences way back in 2008.
Earlier, the Delhi High Court had held the merger between Idea Cellular and Spice on a complaint filed by the DoT. The Additional Solicitor-General of India had also held Idea Cellular to be in violation of the lock-in period clause, which stipulates that a company cannot enter into an agreement for merger for three years from the effective date of licence. In this case, new licences were issued to Spice and Idea Cellular on January 25, 2008. Hence, the two companies could not have merged operations until January 2011.
