Merger deal: Idea faces Rs 600 cr DoT penalty

A high level panel in Department of Telecom on Tuesday recommended a Rs 600 crore penalty on Idea Cellular for a merger deal with Spice Communications saying that the company's move had violated licence conditions in six telecom circles.

The committee, however, has given conditional go-ahead to the merger of the two licences in Karnataka and Punjab circles, sources said.

“Idea can continue offering the services in Punjab and Karnataka circles by paying the penalty,” a DoT official said.

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 companies had licences for Andhra Pradesh, Delhi, Haryana, Maharashtra, Punjab and Karnataka circles. As per the rules, a telecom operator cannot hold more than 10 per cent stake in another operator in the same circle.

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