Telecom department slams Rs 600-crore penalty on Idea over Spice merger

MUMBAI: Idea Cellular said it has received a notice from the telecom department seeking a penalty of Rs600 crore for violating licence conditions while acquiring smaller rival Spice Communications five years ago. The DoT has said it will accept the merger between Aditya Birlaowned Idea and Spice Communications if the fine and a few other conditions are complied within 15 days, according to the notice.

“Idea is preparing to take necessary steps to challenge the DoT letter at appropriate forum,” Idea said in a notice to the stock exchanges. Idea acquired Spice as part of a three-way deal with Axiata ( Telekom Malaysia at the time of the deal) in 2008. It completed the merger process after the Gujarat and Delhi High Courts approved it in March 2010. The merger valued Idea Cellular shares at Rs158 a piece.

The DoT has since challenged it, and reports of show-cause notices on the merger have emerged time and again.