Vodafone India may miss the 30th June deadline for its merger with Idea Cellular after it emerged that the company owes the Indian Department of Telecommunications (DoT) INR47 billion ($690 million) in unpaid spectrum fees.
The charges date back to 2015, when Vodafone combined its five separate Indian companies into one unit. The merger prompted the DoT to charge Vodafone INR67 billion in spectrum fees and other regulatory charges, which the operator contested via legal action.
To expedite the merger, India’s Supreme Court ordered Vodafone to provide a stopgap payment of INR20 billion. Since the DoT reserved the right to dispute the remaining fee, the amount was left open to further legal action but no final sum was ever agreed.
The DoT now believes it has a legal case to charge Vodafone the full INR47 billion remainder before granting the operator final clearance to merge with Idea Cellular. The DoT also looks set to issue Idea with a requirement for INR21 billion in bank guarantees to cover its spectrum licence fees.
The long-awaited merger between Vodafone India and Idea Cellular has been cleared by all relevant Indian authorities across the last year, with the DoT being the final holdout – although last week it claimed its approval was “imminent”. The merged entity will become the new market leader in terms of subscriber numbers.