India’s Idea Cellular has received a breather from a 2.5 billion rupee ($56.3 million) fine, allegedly for breaking license rules during its acquisition of Spice Communications.
The fine had been imposed on Idea by the country’s Department of Telecom (DoT) for holding overlapping mobile licenses in six circles in India after its October 2008 acquisition of Spice. Local rules do not permit an operator to own a greater than 10% stake in another provider in areas where both operate.
According to the Economic Times, Justice SB Sinha of India’s Telecom Disputes Settlement & Appellate Tribunal, a body which attempts to resolve disputes in the telecom sector, had found in Idea’s favor, noting in its ruling that Idea was not a ‘fly-by-night’ operator.
Idea had merged Spice’s licenses in the Punjab and Karnataka circles with its own, but failed to use the licenses in four other regions where Spice had yet to start operating.
The DoT had earlier also imposed a 500 million rupee fine on Idea for violating license rules in the Punjab circle, and this fine was also put on hold till further notice.
Idea however, faces license merger challenges from a local court, which had a day earlier ruled that the six licenses from Spice could not be transferred to Idea due to non-compliance. Idea had also been ordered by the local court to pay a 10 million rupee fine for non-disclosure of information.
The Wall Street Journal reports thatIdea MD Himanshu Kapania denied any wrongdoing and said the company would appeal for what it believed was right.