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DoT slaps Rs 600cr fine on Idea

New Delhi, Dec. 3: The department of telecom (DoT) has slapped a fine of Rs 600 crore on Idea Telecom for allegedly violating licence conditions in its merger deal with Spice Communications.

Idea said it would contest the fine. In a filing with the BSE, the company said it was preparing “to take necessary steps to challenge the DoT letter at an appropriate forum”.

Officials in the telecom department said the company was required to take permission for a merger and change of name under which services were offered in the two circles of Punjab and Karnataka, which were taken over by Idea.

Rules also stipulate that a telecom operator cannot hold more than 10 per cent stake in another operator in the same circle. Spice Communications Ltd (Spice) was amalgamated with Idea on March 1, 2010.

Consequently, the DoT had written on November 29, that the government was willing to take the merger “on record and change the name of two Spice unified access service licences of Punjab and Karnataka service areas”. However, the DoT has stipulated that this will be “subject to Idea paying a financial penalty of Rs 600 crore”.

The money has to be paid and certain other conditions met within the next 15 days.

In 2008, Idea Cellular had acquired a 41.09 per cent stake in Spice Communications. The merger had resulted in the 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.

In February 2012, the Supreme Court cancelled Idea’s licences for Punjab and Karnataka, while Spice lost its licences for Andhra Pradesh, Delhi, Haryana and Maharashtra. Therefore, the only two licences that remained out of Spice’s circles, which were taken over by Idea, were Punjab and Karnataka.

Meanwhile, Idea today 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 are priced at Rs 599 and Rs 1,499 with a validity of 10 and 30 days, respectively.

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