Vodafone to pay USD300m for merger licence

25 Nov 2015

India’s Supreme Court has directed Vodafone India to deposit INR20 billion (USD301.27 million) with the Department of Telecommunications (DoT) in exchange for a merger licence, the Economic Times reports. The decision will clear the way for Vodafone to merge six of its Indian units following a protracted legal battle with the DoT. In 2012, Vodafone sought to combine its Vodafone East, Vodafone South, Vodafone Cellular and Vodafone Digilink arms with its Vodafone Mobile division, at the same time looking to combine Vodafone West and Vodafone Spacetel with Vodafone Services. The consolidation plans were originally drawn up with a view to launching an initial public offering (IPO), but the plan was later dropped due to poor market conditions, and instead the reshuffling would focus on reducing inefficiencies in the cellco’s existing structure.

The regulator had sought INR69.3 billion from the company for the mergers, relating mainly to the fees surrounding the companies’ spectrum holdings, including one-time spectrum fees, usage charges, and a requirement to pay the DoT a market-linked price for spectrum under India’s merger and acquisition rules. Vodafone contested the DoT’s request in the Telecom Disputes Settlement and Appellate Tribunal (TDSAT), which ruled in favour of the cellco. In response, however, the DoT took the matter to the Supreme Court, which has arrived at the figure of INR20 billion.

India, Department of Telecommunications (DoT), Vodafone India