DoT asks Idea to return licences in Punjab or Karnataka for Spice merger

Mumbai: The government has asked cellular operator Idea to surrender the licence of either Punjab or Karnataka telecom circle to enable the merger of Spice Communications with itself.

The company would, however, get no refund on return of the license, which is overlapping, sources at the department of telecom said.

''What will one do with two licences? You need just one to offer the service. Obviously, Idea has to return one licence (in each circle) but there wouldn't be any refund for this," DoT secretary Sidhharth Behura said.

For Idea, which reported a 14.7 per cent fall in net profit at Rs263.1 crore in the first quarter of the the current financial year, could lose Rs300 crore on this score. Idea lost on forex and higher interest charges although the company saw robust subscriber growth of 47 per cent.

Idea could surrender its own licences and retain Spice licences in both the circles as Spice has 800 MHz spectrum in these two areas which can accommodate more users.

Spice is already offering services there whereas Idea is yet to start service. It has got 4.4 MHz spectrum for Karnataka and for Punjab it has just got a licence.

Idea Cellular had acquired a controlling stake in Spice Communications in June for about Rs2,700 crore, which left it holding additional licences in Punjab and Karnataka, may now return one of the licences in each circle of Punjab and Haryana.