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Vodafone charged $300M for merger licence by Indian court

The Indian Supreme Court is charging Vodafone INR20 billion ($300 million) for a merger licence that will allow it to consolidate 6 of its units in the country.

As the operator group prepares an IPO of its Indian businesses, it has been instructed to deposit the fee with the Department of Telecommunications (DoT). An ongoing tax dispute with the government – which may soon be resolved – brought a premature end to Vodafone’s previous plans for an IPO in 2012.

The original licence fee was pinned at INR69 billion by the DoT, and purported to include charges for spectrum and regulatory costs. Vodafone was successful in getting this overturned by the Telecom Disputes Settlement and Appellate Tribunal (TDSAT), although it will still face fees from the lower courts.

The TDSAT’s ruling was contested by the DoT in the Supreme Court, with the higher court eventually electing to charge Vodafone an INR20 billion fee based on the operator’s previous offer to pay INR18 billion as a means of accelerating the merger process.

Vodafone’s original IPO proposal involved merging holding company Vodafone Mobile Services with Vodafone Cellular, Vodafone Digilink, Vodafone East and Vodafone South. It also intended to fold Vodafone Spacetel and Vodafone West into Vodafone Mobile Services.

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