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Idea Cellular to challenge Rs600 crore penalty demand news
03 December 2013

Telecom operator Idea Cellular Ltd said today it had received a government notice asking for Rs600 crore in penalties for allegedly violating rules when it acquired Spice Communications five years ago; and added in a filing to the stock exchanges that it would challenge the order.

In 2008, Idea India's third-biggest cellular carrier by revenue and users - agreed to buy smaller rival Spice Communications in a three-way deal that also gave Malaysia's Axiata about a 20-per cent stake in Idea.

Idea currently runs Spice operations in two zones as part its own operations.

The telecommunications ministry has said Idea violated rules as it held permits in zones where Spice had operations. Indian rules had previously prohibited companies from owning 10 per cent or more in a competing carrier in the same zone.

Idea has denied any wrongdoing and has said the merger was approved by the courts.

The markets largely ignored the news, and shares in Idea were trading about 0.3 per cent lower by 10:35 am.

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Idea Cellular to challenge Rs600 crore penalty demand