Idea, Spice face licence cancellation in K'taka, Andhra

The Telecom Ministry has issued a showcause notice to Idea Cellular for the Karnataka circle and Spice for the Andhra Pradesh circle for cancellation of licences on account of a delay in network roll-out.

"Yes, they have been issued (notices). Idea Cellular for Karnataka and Spice for Andhra Pradesh have been issued showcause notice for cancellation of license on account of delayed roll-out obligations," Telecom Secretary R Chandrasekhar told PTI.

In 2008, Idea bought Spice, but has not yet received approval from the DoT to go ahead with the merger.

"The notices have been sent recently. The companies have been given 60 days to respond, he said.

Idea and Spice Telecom had procured these licences in January, 2008, under the regime of former Telecom Minister A Raja, who has been arrested on charges of irregularities in distribution of 122 new licences along with 2G spectrum.

Earlier, the government collected approximately Rs 300 crore as liquidated damages from new operators, including Idea and Spice, over their failure to roll-out their networks as per the licence agreement. After collecting the penalties, notices are now being sent for cancellation of licences.

Telecom regulator Trai had also recommended the cancellation of licences of leading mobile operators Idea Cellular and Spice in five states for their failure to roll out services within the stipulated time.

However, Aditya Birla group firm Idea had earlier said that it has not breached the licence agreement.

When contacted to seek their comment on the receipt of the cancellation notice, Idea officials said they are yet to receive any showcause notice.

Last month, the Telecom Ministry had secured an ex-parte stay from the Delhi High Court on the merger between Idea and Spice, a decision opposed by the Aditya Birla group, which charged that the DoT was trying to cover up its "inefficiencies".

Idea is facing charges of violating the terms and conditions of the licence by retaining overlapping licences, but the company claims it never wanted to retain the unused spectrum and had offered to surrender the overlapped licences.

As of March 31, 2011, Idea Cellular has 8,95,03,318 mobile subscribers.