DoT norms may force Idea to pay more for Spice

Idea Cellular may have to pay more for acquiring Spice Communications. The government has set up a committee to specify spectrum transfer charges in case of mergers.

And while the Idea-Spice deal was announced before the panel was set up, a senior official in the department of telecom (DoT) said it is possible that charges may be levied on this merger as well. “It is up to the committee to decide if this fee would be applicable to the Idea-Spice deal,” the official added, while refusing to give details.

DoT, while announcing merger guidelines earlier this year, had said telcos would have to pay a spectrum transfer charge during a merger, but did not specify the fee.

Industry sources are divided on whether the Idea-Spice transaction should attract spectrum transfer charges as DoT has already asked Idea Cellular to surrender one of the two telecom licences for Punjab and Karnataka circles. This is because Idea Cellular, which had acquired a controlling stake in Spice (which offered mobile services in Punjab and Karnataka) for about Rs 2,700 crore in June, held two licences in these circles after the acquisition.