Vodafone contests government’s Rs 3,900 cr demand ahead of Idea merger

Vodafone has challenged the government’s demand of Rs 3,900 crore as payment towards non-auctioned spectrum, while working on the merger with Idea Cellular, claiming that was billed nearly 10% more than what was due.

While telecom secretary Aruna Sundararajan said the merger process between the two companies is “on track” and awaits a final clearance pending submission of the required payments, Vodafone raised its queries with the ministry over payment demand.

“Vodafone has objected to the payment demand raised by the telecom department as part of charges towards realising market price for the non-auctioned spectrum it holds. There are certain discrepancies that the company has pointed out in calculations,” an official source said. “These are being considered and we hope to give a final response to their query soon.”

While the telecom department has granted an approval to the merger between Idea Cellular and Vodafone, it has placed certain conditions for it to go through. Apart from the Rs 3,900-crore dues that Vodafone has to pay, Idea Cellular has been asked to pay a bank guarantee of Rs 3,342 crore on account of one-time spectrum charges (OTSC).

The companies are likely to challenge the OTSC in telecom tribunal TDSAT and hope to get a relief, considering that Airtel received a similar reprieve at the time of purchase of Telenor.

The proposed merger has already been approved by the Competition Commission of India, Sebi and the stock exchanges, and NCLT.

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