New Delhi, June 25: Idea Cellular may have to return Spice’s spectrum in Andhra Pradesh.

Idea has 8.2 Mhz spectrum in Andhra Pradesh where it has 3.55 million subscribers, while Spice recently got 4.4 Mhz, which will be Idea’s on the completion of the merger of the duo. The Birla firm, therefore, will have 12.6 Mhz spectrum, whereas government norms specify that an operator needs to have 9 million subscribers to be entitled for 12.6 Mhz spectrum.

The merger norms announced by the department of telecom (DoT) in April this year entitled a merged entity to the total amount of spectrum held by the merging companies. However, it had placed stiff riders — the new entity had to meet the subscriber criterion within three months.

According to the guidelines, “In case of failure to meet the spectrum allocation criterion within a period of three months, the post-merger licensee shall surrender the excess spectrum, if any, failing which it may be treated as violation of terms and conditions of the licence agreement and action shall be taken accordingly.

“In addition, after the expiry of the three-month period, the applicable rate of spectrum charge shall be doubled every three months in case of excess spectrum held by the post-merger licensee,” the guidelines said. However, analysts said that the DoT in its guidelines had only referred to “merger” and not “merger and acquisition”. This had led to some ambiguity on whether the guidelines sought to make a distinction between “merger” and “acquisition”.

“Idea could use this ambiguity to manipulate the deal so as to retain Spice’s spectrum in Andhra Pradesh,” analysts said. The Telecom Regulatory Authority of India, which had proposed the guidelines and had referred to “merger and acquisition”, has already complained to the DoT on this.

Trai chairman Nripendra Misra in his latest communication to the DoT had said that the ministry should not have dropped the term “acquisition” as there were clear cut differences between “merger” and an “acquisition”.

“A merger can happen when two companies decide to combine into one entity or when one company buys another. An acquisition always involves the purchase of one company by another,” said Misra, adding that under the companies act, a “merger” required the approval of a high court.

Spice, which operates in the Karnataka and the Punjab circle, has spectrum in the 900 Mhz band, which can accommodate a larger number of subscribers than the 1800 Mhz band used by other GSM operators.