TDSAT stays DoT demand of Rs 250 crore from Idea Cellular

The Telecom
Disputes Settlement and Appellate Tribunal (TDSAT) has restrained the DoT from
enforcing the penalty of Rs 250 crore imposed on Idea for five overlapping


This came after news that the Delhi High Court’s ruling
on Monday stating that the six licenses of Spice Communications that were due
to be transferred to Idea, which bought them in 2008, would instead be given
back to DoT, as Idea had ‘failed to comply with the license and merger
guidelines’. Idea was also asked to pay a fine of Rs 1 crore for suppressing
documents of correspondence between the two firms, as well as documents between
Idea and DoT wherein on two occasions DoT had rejected the Spice-Idea merger.
Idea denied this accusation.


According to the tribunal, non-filing of some documents
cannot be a ground for refusing relief to Idea. However, it directed Idea to
provide all relevant documents to DoT.


In Februrary this year, Additional Solicitor General A S
Chandiok, had suggested that the penalty for holding overlapping licences
should be as much as Rs 50 crore per licence. In this regard, TDSAT observed
that since the order on the transfer of licenses was expected by the Delhi High
Court at the end of this month, the penalty of Rs 250 crore should be stayed.


According to Idea’s statement, The interim order has
been granted on Idea’s plea against DoT’s demand notice issued to Idea in June ’11. Earlier, TDSAT had also ruled against DoT’s demand notice to Idea imposing
a penalty of Rs 50 crore for the Punjab circle.”


In 2008, DoT asked the Delhi High Court to revoke the
licenses of Idea held in the six circles belonging to the erstwhile Spice
Communications, after the latter bought them out, alleging that the possession
of these licenses violated industry rules on M&A’s according to which an
operator cannot hold more than 10 percent share in a competitor’s company in
the same circle. However, Idea argued that it had been granted spectrum for the
areas where it held overlapping licenses and had paid the necessary entry fees,
despite not using spectrum in five of the areas where its licenses overlapped
with Spice.


According to Idea’s statement in February, the Idea and
Spice merger, since approved by the courts, happened to involve 6 overlapping
licenses. Despite being issued spectrum for 5 of these, it is Idea which
advised the DoT that it was not using such spectrum, in effect, placing
overlapping licenses in a de facto escrow, pending receipt of DoT’s formal
letter of merger, including surrender if at all that was attracted.


By Beryl M

[email protected]