Idea Cellular is going to challenge the Department of Telecommunications? (DoT) order directing the operator to pay a penalty of Rs 6 billion for the alleged violation of terms and conditions of CMTS/UAS licenses while acquiring Spice Communications Limited in 2008.
In a filing with the Bombay Stock Exchange, the operator has stated that it is preparing to take necessary steps to challenge the DoT letter on an appropriate forum. Earlier in 2008, Idea Cellular had agreed to buy Spice Communications Limited in a three-way deal which also gave Malaysia-based company Axiata about one fifth share in Idea Cellular.
Subsequently, Spice Communications Limited was amalgamated with Idea cellular effective March 01, 2010, following approval of company merger by the Gujarat High Court and later by the Delhi High Court.
However, DoT is of the view that the deal was in violation of the licencing norms as Idea Cellular held licences in the same circles as Spice Communications Limited. As per the rules, a telecom operator cannot hold more than 10 per cent or more stake in another operator in the same circle.
