DoT may approve merger of Vodafone, Idea Cellular in the next few days

The department of telecommunications (DoT) is likely to approve the merger of Vodafone and Idea Cellular in the next few days, making the combined entity the country’s largest mobile services operator.

Sources said all the wings of the DoT as well as Telecom Secretary Aruna Sundararajan had given a go-ahead to the merger. After signature by Communications Minister Manoj Sinha, the approval document will be sent to the companies.

The sources further said neither company would have to pay big sums to the government as most dues, including licence fees and spectrum charges, were under litigation.

“Dues under judicial intervention cannot be sought by the government. Only the ongoing dues need to be paid by the companies at the time of merger,” a source in DoT said.

The source added that although one-time spectrum charges had also been stayed, Idea Cellular, the acquirer, would have to furnish a bank guarantee for this charge in accordance with the merger and acquisition guidelines. One-time spectrum charges for Idea Cellular stand in the range of Rs 20-25 billion. Idea is likely to contest the bank guarantee demand by the DoT. Ongoing dues, which include penalties and other minor charges, are just a few billion rupees, which will be paid at the time of merger.