DoT Wants Vodafone and Idea to Clear Dues before Merger | CORPORATE ETHOS

DoT Wants Vodafone and Idea to Clear Dues before Merger

By: | April 13, 2018

April 13: The Department of Telecom is likely to put up a demand to clear the dues ahead of the proposed Vodafone-Idea merger.

Accordingly, a collective due of $3 billion, equal to around Rs 18870 crore, related to pending license fees, spectrum usage charges (SUC and one-time spectrum charges (OTSC) will have to be put forward by the duo before merging into a single entity. Sources close to the matter have said that the due will be put as a pre-condition for clearing the merger.

Vodafone India’s license fee and SUC dues amounted to Rs 5532 crore, while that of Idea stood close to Rs 7625 crore. The OTSC dues of Vodafone and Idea stood respectively at Rs 3600 crore and Rs 2113 crore according to CAG’s July 2017 report.

However, an executive from one of the company has opined that the government won’t be able to force the companies to clear the dues, citing the ongoing dispute in relation to telco’s adjusted gross revenue. The DoT is however likely to push for bank guarantees on OTSC dues incase the decision is legally challenged, and that would be despite the OTSC matter also being in court.

Previously, DoT was ordered to grant approval for the acquisition of Telenor India by Bharti Airtel without bank guarantee by Telecom Disputes Settlement and Appellate Tribunal.

OTSC dues, based on DoT rules, demand telco holding beyond 6.2 MHz circle between July 2008 and December 31, 2012 to pay a one-time market-linked price for additional spectrum held. Telcos are also supposed to pay market price for airwave holdings beyond 4.4 MHz/circle.