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DoT Seeks Legal Opinion on Voda-Idea Merger Over Former’s Spectrum Holding

The Department of Telecommunications (DoT) is seeking legal opinion on the Vodafone-Idea Cellular merger with respect to Vodafone’s administratively allocated spectrum holdings, according to industry sources.

As per merger and acquisition (M&A) guidelines, for such spectrum holdings of the acquired entity, the acquirer has to pay differential between the market determined price and the entry fee.

Such payments have to be made for 4.4 MHz of spectrum on a pro-rata basis for the remaining period of licence validity and DoT raised such demands to Vodafone at the time of the merger of Vodafone group companies in 2015, sources said.

Vodafone had challenged these demands with the Telecom Disputes Settlement and Appellate Tribunal (TDSAT), but part of the demand (Rs 20 billion out of the Rs 67 billion) had been paid on the directions of the Supreme Court.

The DoT is seeking legal opinion on whether a fresh demand can be raised on Idea for the differential amount between the market determined price and the entry fee paid for 4.4 MHz of the administratively allocated spectrum of Vodafone.

It is also seeking legal opinion on whether this would be willful disobedience of the court. – Business Standard

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