DoT show cause notice to Idea for violating M&A norm in Punjab | delhi | Hindustan Times
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DoT show cause notice to Idea for violating M&A norm in Punjab

delhi Updated: Feb 24, 2011 22:24 IST

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The Telecom Ministry has issued a show cause notice to the Aditya Birla group firm Idea Cellular for violating norm of 'substantial equity' in the Punjab circle.

"The department has issued a show cause notice for termination of Unified Access Service (UAS) licence of Idea Cellular for the 3G service area in Punjab," sources in the know said.

When contacted, Idea spokesperson declined to comment saying the matter is subjudice.

In 2008, Idea Cellular had picked up 41.09 per cent stake in Spice, that resulted in both telecom players holding 12 licences in six circles.

Idea Cellular paid Rs 5,768 crore to bag 3G licences in 11 circles, of which Rs 322 crore was paid for Punjab circle.

However, the company moved to telecom tribunal TDSAT, in January this year, against DoT for not getting 3G spectrum for commercial use in the Punjab circle.

According to sources, show cause notice has been served only for Punjab circle as of now and similar action may be taken for other circles as well where the company is in violation of licence terms and conditions with regard to mergers and acquisition.

Recently, the Additional Solicitor General of India (ASGI) Amarjit Singh Chandhiok had said Idea Cellular had violated the merger and acquisition (M&A) norms.

He suggested imposition of stringent penalties, including a Rs 300 crore fine, withdrawal of 3G spectrum in four circles and cancellation of 2G licences in the six circles where the companies Spice and Idea held multiple licences.

"...once the show cause notices to Idea Cellular and for Spice Communication to pertaining to Punjab service are issued, then no question of amendments of licence agreement for provision of 3G services arise," he said.

Chandhiok also suggested that in case DoT issued a show cause notice for Punjab service area, the Department should refund the sum of Rs 322.01 crore deposited for 3G license.

However, Idea Cellular has maintained that it has not breached any license conditions and has written 20 letters to the DoT over the past 30 months, but failed to get any response from the government.