TDSAT Directs DoT to Offset Vodafone Idea's Excessive Payment of Rs 755.52 Crore Towards License Fees and Spectrum Usage Charges. This Ruling Provides Significant Relief to the Debt-Ridden Telecom Giant, Easing its Financial Struggles.
During the 2018 merger of Vodafone India and Idea Cellular, DoT had collected an excessive amount from Vodafone Idea, amounting to Rs 755.52 crore, which the tribunal has now instructed to be adjusted. This decision comes as a boon for Vodafone Idea, which has long been grappling with challenges in securing external funding.
Initially, DoT demanded Rs 3,926.34 crore from the merged entity as spectrum liability in 2019, a payment made by Vodafone Idea to ensure a smooth merger process. However, the company contested this calculation, asserting that the actual liability was Rs 3,170.82 crore, leading to a petition filed with TDSAT challenging DoT's assessment.
As per the TDSAT ruling, the initial demand issued by DoT in July 2018 for Rs 3,926.34 crore pertained to spectrum below 4.4 MHz, based on the disparity between the entry fee paid and the market-established price.
"The TDSAT order clarified that the original demand of Rs 3,926.34 crore from DoT in July 2018 was related to spectrum below 4.4 MHz, factoring in the difference between the entry fee paid and the market-determined price. TDSAT stated in its order, 'The approval was granted for the merger of Vodafone Mobile Services (VMSL) and M/s Vodafone India (VIL) with M/s Idea Cellular, subject to specific conditions. The government calculated the total liability to be Rs 3,926.34 crore.' The tribunal further added, 'The revised assessment now stands at Rs 3,170.82 crore.'"
The government holds approximately a 33% stake in Vodafone Idea, a company that is yet to launch its 5G services and is actively seeking external funding to settle its vendor dues and bolster its network investments.
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