The Telecom Ministry is likely to terminate the licences of Idea Cellular in six circles, including Delhi, Karnataka and Punjab, and impose an additional Rs 300 crore penalty on the company for violating roll-out obligations.
"The Department of Telecom will soon send notice to Idea Cellular asking them to stop their services in six service areas in Karnataka, Punjab, Maharashtra, Haryana, Andhra Pradesh and Delhi. The department has also imposed a fresh penalty of Rs 300 crore on the company for missing out roll-out obligations," a source close to the development said.
Of these six licences, four belong to Idea in the Punjab and Karnatka service areas and four licences are of Spice Communications, which was acquired by Idea, he said.
Earlier, the DoT had imposed a penalty of Rs 300 crore on Idea Cellular, against which the company had gone to telecom tribunal TDSAT and got an order to pay 50 per cent of the total amount.
Last year, telecom regulator Trai had recommended cancellation of the licences of Idea in the Karnataka and Punjab circles and that of Spice in Maharashtra, Haryana and Andhra Pradesh to the DoT.
Idea bought Spice in 2008, but has not yet received approval from the DoT to go ahead with the merger.
However, as per Trai, since no explicit approval has been received from the DoT till date for merger of the licences of the two companies for six service areas in which they were competitors, it is obligatory for both of them to individually comply with the licencing rules.
The DoT had also accepted the recommendations of Additional Solicitor General Amarjit Singh Chandhiok for imposition of a Rs 300 crore penalty on Idea Cellular for holding more than a 10 per cent stake in two mobile companies in six telecom circles, a violation of existing norms. These were Karnataka, Punjab, Maharashtra, Haryana, Andhra Pradesh and Delhi.
On April 1, DoT had secured an ex-parte stay from the Delhi High Court on the merger between Idea and Spice, a decision which the Aditya Birla group firm has said it will oppose, charging that the DoT was trying to cover its inefficiencies.