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Aditya Birla Group firm Idea Cellular today approached the sectoral tribunal TDSAT against a DoT notice to cancel its licence in Punjab for violating merger and acquisition (M&A) norms.
On April 21, the Department of Telecom (DoT) issued show cause notice (SCN) to Idea as to why its licence for the Punjab circle should not be cancelled on violation of M&A norms.
The company has also been slapped with Liquidated Damages (LD) for not rolling out its services as per the norms in the same circle.
Idea has, thus, contended that DoT can’t issue SCN for cancellation of Unified Access Service Licence (UASL) while it asks the company to pay LD for failure to roll out its services.
The DoT has countered this argument, saying that demanding LD for failure to roll out services from an existing licensee is a separate matter from the SCN for violating the terms of UASL (Unified Access Service Licence).
As per the terms, a licensee is not allowed to merge or amalgamate with any other company for the first three years.
It also provides that a person can’t hold 10 per cent or more stake in more than one licence in the same telecom circle or service area.
The Idea Cellular has 41.09 per cent stake in Spice Telecommunication since October 17, 2008.
The DoT had on February 24, 2011 slapped a penalty of Rs 50 crore on Idea Cellular for not providing requisite information about its merger with Spice Telecom despite several requests.
The Delhi High Court has last month stayed the merger of Spice with Idea, which has been challenged by the company.
On January 31, 2011, Idea had moved Telecom disputes Settlement and Appellate Tribunal (TDSAT) seeking directions to DoT to issue it 3G spectrum in Punjab and Haryana circles, where the allocation has been pending because of Idea’s merger with Spice Telecom.
It also had sought directions to the DoT for making necessary amendments in the licence terms so as to make Idea Cellular a licensee of 3G spectrum in Punjab.
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