New Indian market leader Vodafone Idea is launching a legal challenge against the INR33 billion ($444 million) guarantee demanded by the Indian government as a condition for approving the operator’s creation.
India’s Department of Telecommunications imposed the lump sum spectrum charge as a prerequisite for approving the merger of Vodafone India and Idea Cellular, which completed in August. Vodafone ended up paying INR39 billion and Idea INR33 billion.
The amount was supplied via both cash payments and bank guarantees, and was calculated by subtracting the standard fee for spectrum allocation from the market price of spectrum not sold at auction. Vodafone Idea has already twice asked that the amount be re-examined but the DoT has not responded.
According to The Economic Times, the merged operator is now petitioning the Telecom Disputes Settlement and Appellate Tribunal on the grounds that the demand is “arbitrary, discriminatory, illegal and unenforceable”.
The case will be reviewed by the tribunal on 20th October.