Idea-Vodafone Merger Likely to be Delayed as DoT Plans to Raise Rs 4,700 Crore Demand for OTSC

One of the most important and strategic deals of the year, the Idea Cellular and Vodafone India merger might hit a new roadblock as this latest news points out. The two big telecom giants of the country might have to push on the June 30 deadline of the merger as the DoT has been expected to raise a new demand of Rs 4,700 crore, a source said to PTI. Vodafone India will be raising the demand ahead of its merger with Idea Cellular. An official PTI source said “Vodafone India had merged its all arm into one company and there are dues of around Rs 4,700 crore related to one-time spectrum charges (OTSC) on the company. DoT will ask Vodafone to either clear dues or furnish bank guarantee before the merger with Idea.”

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It was in 2015 when Vodafone merged its four subsidiaries – Vodafone East, Vodafone South, Vodafone Cellular and Vodafone Digilink with Vodafone Mobile Services. The entity is now known as Vodafone India. At that point of time, a demand of Rs 6,678 crore was raised from the Department of Telecommunications for One Time Spectrum Charges (OTSC) by Vodafone India. However, the telco challenged the demand in court, after which it was able to get the deal cleared in Rs 2,000 crore.

Now, with the Idea Cellular and Vodafone India merger in sight, the department is rethinking its options. Telecom minister, Manoj Sinha has likely urged the department to seek legal opinion whether or not raising the demand from Vodafone India will be right.