DoT may cancel licences of Idea, Spice in 5 circles

The communications and information technology ministry is likely to cancel the licences of leading mobile operators Idea Cellular and Spice in five states for failing to roll out services within the stipulated time.

The Telecom Regulatory Authority of India (Trai) has recommended to the Department of Telecommunications (DoT) for cancellation of Idea’s licences in the Karnataka and Punjab circles and Spice’s in the Maharashtra, Haryana and Andhra Pradesh circles.

A DoT note says: “According to Trai’s recommendation, as on date (December 22, 2010) these licencees are in violation of terms and conditions pertaining to rollout obligations.”

It, meanwhile, said since the spectrum (radio waves) to Spice had not been allocated in Delhi, it did not violate the service rollout norms for this circle.

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

“Trai has mentioned that since no explicit approval has been received from DoT till date for merger of licenses of Idea and Spice for six overlapping service areas, it is obligatory for both of these licencees to comply individually with licensing terms and conditions pertaining to the rollout obligations,” said the DoT note.

However, Idea, an Aditya Birla Group company, maintains it has not breached the licence agreement.

Meanwhile, DoT is believed to have accepted the recommendations of Additional Solicitor General Amarjit Singh Chandhiok to impose a Rs 300-crore penalty on Idea for holding more than 10 per cent stake in two mobile companies in the six telecom circles, in violation of the existing norms. These circles are Karnataka, Punjab, Maharashtra, Haryana, Andhra Pradesh and Delhi.

On April 1, DoT had secured an ex-parte stay from the Delhi High Court on the merger of Idea with Spice, a decision the Aditya Birla Group company has said it would oppose, charging that DoT was trying to cover its “inefficiencies”.