Idea gets Rs 600 crore penalty notice over Spice merger issue

PTI | DECCAN CHRONICLE
Published Dec 3, 2013, 8:56 pm IST
Updated Mar 18, 2019, 9:48 pm IST
Telecom firm receives letter from DoT over violation of licence conditions on merger with Spice.

New Delhi: Idea Cellular on Tuesday said it has received a letter from Department of Telecom (DoT) imposing a penalty of Rs 600 crore for alleged violation of licence conditions in its merger deal with Spice Communications.

The DoT, however, said the merger of the operational Spice licences of Punjab and Karnataka can be taken on record if Idea pays up the penalty of Rs 600 crore within next 15 days, Idea Cellular said in a filing to the BSE. The company is preparing to take necessary steps to challenge the DoT letter at appropriate forum, it said.

"Idea Cellular Limited has received a communication from DoT, Ministry of Communications & IT, on imposition of financial penalty of sum of Rs 600 crore for alleged violation of terms and conditions of CMTS /UAS licences while acquiring erstwhile Spice Communications Limited," the filing said.

As per the rules, a telecom operator cannot hold more than 10 per cent stake in another operator in the same circle. Spice Communications was amalgamated with Idea effective March 1, 2010, after approval of merger by the Gujarat High Court on November 26, 2009, and the Delhi High Court on February 5, 2010, the filing said.

It added the Delhi High Court passed an order on July 13, 2012, asking DoT to give its final decision on transfer of operational Spice licences of Punjab and Karnataka in the name of Idea.

"...the DoT has written that the Department is prepared to take the merger of companies...on record and change the name of two Spice UAS licences of Punjab and Karnataka service areas subject to Idea paying financial penalty of Rs 600 crore besides other list of compliances within next 15 days," the filing said.

The DoT letter is dated November 29, 2013, it added.

In 2008, Idea Cellular acquired 41.09 per cent stake in Spice Communications. The companies merged in 2010, which resulted in overlapping of licences in six circles.

At the time of the merger, both the companies had licences for Andhra Pradesh, Delhi, Haryana, Maharashtra, Punjab and Karnataka.

Meanwhile, the Supreme Court in its February 2012 order cancelled Idea Cellular's licences for Punjab and Karnataka circles, while Spice lost its licences for Andhra Pradesh, Delhi, Haryana and Maharashtra.

As a result, only Punjab and Karnataka licences are operational post the merger. 

Next: Idea launches two international roaming packs

Idea launches two international roaming packs

New Delhi: Idea Cellular on Tuesday launched two international roaming packs for its postpaid customers offering a discount of up to 95 per cent on data and 80 per cent on voice tariffs.

The packs, available across 40 countries including UAE, USA, Singapore, UK, Thailand, China, Germany, France and Switzerland, are priced at Rs 599 and Rs 1,499 with a validity of 10 and 30 days respectively, Idea said in a statement.

"Our international roaming arrangements across 40 frequently visited countries will enable Idea users enjoy seamless connectivity at affordable roaming rates, whether on a holiday or business trip, this season," Idea Cellular Chief Marketing Officer Sashi Shankar said.

With the two new packs, while on international roaming, local and international outgoing calls can be made for Rs 15 per minute and incoming calls for Rs 30 per minute.

Data will be charged at the rate of Rs 30 per MB.

Apart from other voice and data benefits, the Rs 1,499 pack also offers 30 minutes of free incoming calls while roaming internationally, it added.

The standard rental rates for international roaming varies across countries with the company charging Rs 185 per minute for international calls and Rs 512 per MB for data while in UK.

For US, the standard charges are Rs 145 per minute for international calls and Rs 512 per MB for data.

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