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Vodafone Idea moves TDSAT to recover bank guarantees

Misc News - Published on Thu, 11 Oct 2018

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ET Telecom reported that Vodafone Idea, the country’s top telecom operator, has moved the telecom tribunal to recover bank guarantees worth Rs 3,322.44 crore that was paid ‘under protest’ to get the government’s nod for the merging of Vodafone India and Idea Cellular. The bank guarantee was provided to the department of telecommunications on account of one-time spectrum charges as a precondition for approving the merger.

In its petition to the Telecom Disputes Settlement and Appellate Tribunal, Vodafone Idea has also sought quashing of a clause in the merger and acquisition rules which says that in case of judicial intervention, DoT can seek bank guarantees for an amount equal to the demand it has made on a telco towards OTSC. ET has seen a copy of the petition. Vodafone Idea has argued that the demand of bank guarantees was “arbitrary, discriminatory, illegal and unenforceable”. “Direct DoT to forthwith return each and all bank guarantees which have been wrongly demanded /collected /received by DoT ought not to have been demanded/collected /received, by DoT,” said the interim prayers of the company. TDSAT will next hear the matter on October 20.

ET had reported in September that Vodafone Idea was headed for a legal battle with the telecom department. Its tussle with DoT started when the department demanded OTSC and other spectrum-related dues from Vodafone India and Idea Cellular in July as a precondition for approving their merger. OTSC refers to market price of non-auctioned airwaves, less the entry fee paid at the time of spectrum allotment. This charge has been a bone of contention between DoT and telecom operators, with the matters pending in courts. The barely two-month old Vodafone Idea has also written twice once before the merger and once later to DoT, requesting recalculation of its dues. However, after the first letter and no change in DoT’s stances, Vodafone and Idea had paid INR 3,926.34 crore in cash and a bank guarantee worth INR 3,322.44 crore, respectively, in order to get a speedy approval for the merger, which was cleared end of August.

In September, Vodafone Idea again wrote to the telecom department to recalculate the spectrum dues of INR 3,926.34 crore it had paid to get approval for the merger. It pointed to the difference of opinion with DoT in indexation charges and prices the merging entities paid for spectrum in certain circles like Himachal Pradesh, Tamil Nadu and Bihar.

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Posted By : TelecomGuru on Thu, 11 Oct 2018
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