DoT Asks Vodafone India and Idea Cellular to Clear the Pending Rs 19,000 Crore Dues Before Merger

The much anticipated Vodafone India and Idea Cellular merger seems to have hit a major roadblock. As a pre-condition for clearing their mega-merger, the Department of Telecom (DoT) is likely to ask Vodafone and Idea to collectively clear dues of nearly $3 billion or Rs 18,870 crore relating to a mix of pending licence fees, spectrum usage charges (SUC) and one-time spectrum charges (OTSC), reports Economic Times.

Vodafone Idea

Vodafone India’s licence fee and SUC dues are roughly Rs 5,532 crore while its OTSC dues are about Rs 3,600 crore. Idea’s total licence fee/SUC dues, in turn, is roughly Rs 7,625 crore while its OTSC dues are Rs 2,113 crore.

An executive at one of the two companies said the government won’t be able to force either of the two companies to pay their license fee or SUC dues, since this pertains to computation of a telecom’s adjusted gross revenue (AGR), a matter has been under dispute for more than a decade and is currently sub-judice.

However, the DoT doesn’t seem to agree, with an official saying demand notices will be sent to both companies shortly for approximately Rs 19000 crore.

The report further highlights that even if the licence fee and SUC due demands are legally challenged, the telecom department would insist on bank guarantees for OSTC dues worth nearly Rs 5,713 crore as it adheres to present telecom merger and acquisition (M&A) rules in this case.

This indication comes despite the face that OSTC dues matter along with licensee fee and SUC is also currently being heard in court. It should be noted that average gross revenue or AGR is s the amount of revenue derived from licensed services. Ideally, a telecom operator pays 8% of AGR as license fee and 5% as SUC charges.

Earlier, a senior DoT official told ET that Idea is seeking 100% FDI in the company and is already in discussions with telecom department on behalf of both companies to determine the total dues to be paid before the merger is approved. This is because Idea would continue to be the licensee post-merger with Vodafone India.

Sources say that Vodafone might be required to clear its near Rs 3,600-crore OTSC dues to DoT at the earliest as an identity will not exist after the merger. On the other hand, Idea being the acquirer will be allowed to submit bank guarantees equivalent to its bills.

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50 Comments on "DoT Asks Vodafone India and Idea Cellular to Clear the Pending Rs 19,000 Crore Dues Before Merger"

 

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DUANE
April 16, 2018 8:43 am 8:43 AM

Drop the merger plan totally

Kaushik IMA
April 17, 2018 12:26 pm 12:26 PM

Both won’t survive without merger tbh. Idea is gasping for funds and Vodafone’s patience is exhausted.

KKumar
April 14, 2018 6:39 pm 6:39 PM
So happy, both these operators should be charged heavily, i was using Vodagone’s postpaid number and they were charging alot. They were including additional charges of VAS services which i never activated , so i paid them & port my number to Hidea , after 2 months i got a msg from Vodagone that an amount of 400rs is pending and i was like whatttttt… Then in 10 days Hidea barred my number. I called Vodagone cc and asked them about the charges and they didn’t gave me any clear picture to that. After 2 days of struggling i finally… Read more »
DUANE
April 16, 2018 8:44 am 8:44 AM

If you had an issue with Vodafone you should have sorted it out. No one forced you to use Vodafone I am sure… You had the option of changing your number OR porting out.

Nikhil Mumbai-Pune
April 15, 2018 4:54 pm 4:54 PM

Jio *

Nikhil Mumbai-Pune
April 15, 2018 4:54 pm 4:54 PM

Shift to Bio prepaid or Airtel Postpaid (if you are getting good rental discounts and have good phone)!!!!!Idea Postpaid is also good option!!!!!

jio lover
April 14, 2018 10:16 pm 10:16 PM

Don’t use postpaid in this era

SpEeeED
April 15, 2018 10:58 am 10:58 AM

Ok not using postpaid in this era is good

But international roaming
Works perfectly for postpaid
Where ever we go…

If their is Bill shocks we may go to
Consumer Court and all.. it’s other thing

But sim with prepaid international pack
Not every where works fine

Sudhakar
April 16, 2018 8:05 am 8:05 AM

That proves your poor knowledge about international prepaid roaming. I have used at UAE, Oman,Bahrain and Kuwait in Aircel (when existed), Airtel, Vodafone and Jio. Yes. Jio SIM works even in 2G handsets when abroad because of 2G and 3G network tieup.

geek
April 14, 2018 4:34 pm 4:34 PM

The State is F stifling every operator except its beloved JIO !!!!

Airtel User
April 16, 2018 11:19 am 11:19 AM

Geek is an low paid agent of avoid, where was he all these years before Jio when they were meddling with other operators apart coai. Oh ! I forgot he is a low paid avoid agent that was getting good pay as customers were looted and now due to jio customers are saving money and these low paid agents like these geek rant here on internet forums. Still i challenge you if avoid is not guilty, produce proofs to support your points since i can how avoid arm twisted every other operator in pre jio era.

DUANE
April 16, 2018 8:46 am 8:46 AM

removed

tri_vis
April 16, 2018 11:24 pm 11:24 PM

Burning moment????

Girish Gowda | BengaLuru
April 15, 2018 1:25 am 1:25 AM

Frustrated unpaid agent of airtel spotted.

Think Logic
April 15, 2018 9:42 am 9:42 AM

Hi Gowda, What he said is a FACT.
By the way I am a Jio User as well.
We want the Competition in the Telecom Industry to stay alive.

So I request You to make Yourself aware of the hidden things in Today’s Govt. They want Jio to become Monopolistic by making other Telcos Financially week by hook or crook.

Girish Gowda | BengaLuru
April 17, 2018 9:04 pm 9:04 PM

The previous government had already made the market a monopoly with avoid cartel. Did you not realize that all these years? Wake up and smell the coffee, miss/mr think logic. Live up to your name

Airtel User
April 16, 2018 11:21 am 11:21 AM

Think logic, if jio is being what you accuse, then tell your bosses to file a complaint in courts why rant here !

DUANE
April 16, 2018 8:47 am 8:47 AM

They will never do it. Gujju bhai won’t rule India for much longer

tri_vis
April 17, 2018 10:52 pm 10:52 PM

Grudge against Gujarati people??

Kaushik IMA
April 18, 2018 12:40 am 12:40 AM

U know, eastern elites have a problem with western ones, it’s not new….:P

Anyway treat his comments as “gappa”…

tri_vis
April 16, 2018 11:24 pm 11:24 PM

That we will see in 2019 and 2024.

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