DoT asks Vodafone to migrate to unified licensing regime before merging subsidiaries

NEW DELHI: The telecom department has asked Vodafone India to migrate to the unified licensing regime, if the company wants to merge its different India subsidiaries into Vodafone Mobile Services Ltd.

In an August 27 letter to the company, the contents of which were reviewed by ET, the telecom department has quoted a clause of the unified licence (UL) rules while asking India’s second-largest mobile phone operator to shift to the new permit system. The clause mandates a company to migrate to the new licensing regime in the event of a merger and acquisition.

Vodafone India is the holding entity for the company’s India operations, with Vodafone Mobile Services as a unit. Vodafone Mobile Services, along with some other subsidiaries, runs telecom operations across all the 22 circles in the country.

The DoT’s proposal may not be acceptable to the company as the UL guidelines allow the government to charge whatever price it deems correct for the spectrum held by the company. According to the new rules, “existing licensees who have been allotted spectrum through an administrative process other than auction and who opt to migrate to UL, may be subjected to a charge for any spectrum they hold, as per decision of the government from time to time”.

Pricing of spectrum is a grey area which will become clearer only once the sector regulator comes up with its recommendations, and the telecom department takes a final decision.