The Department of Telecommunications (DoT) has issued a show cause notice to Idea Cellular for the Karnataka circle and Spice for the Andhra Pradesh circle for cancellation of licences on account of a delay in network roll-out.
In 2008, Idea bought Spice, but has not yet received approval from DoT to proceed with the merger. The companies have been given 60 days to respond, he said.
Idea and Spice Telecom had procured these licences in January, 2008, under the regime of former Minister of Telecommunications and IT, A. Raja. Prior to this, the government collected approximately Rs 3 billion as liquidated damages from new operators, including Idea and Spice, over their failure to roll-out their networks as per the licence agreement. After collecting the penalties, notices are now being sent for cancellation of licences.
Meanwhile, the Telecom regulatory Authority of India (TRAI) had also recommended the cancellation of licences of Idea Cellular and Spice in five states for their failure to roll out services within the stipulated time.
However, Idea had earlier said that it has not breached the licence agreement. In April 2011, DoT had secured an ex-parte stay from the Delhi High Court on the merger between Idea and Spice, a decision opposed by the Aditya Birla group, which charged that the DoT was trying to cover up its inefficiencies.
Idea is facing charges of violating the terms and conditions of the licence by retaining overlapping licences, but the company claims it never wanted to retain the unused spectrum and had offered to surrender the overlapped licences.
