Vodafone/Idea merger hits speedbump as DoT prepares OTSC demand

The long-awaited merger of Vodafone India and Idea Cellular is expected to hit another stumbling block this week, delaying the deal beyond its planned 30 June deadline. The Economic Times cites an unnamed official source as saying that the Department of Telecommunications (DoT) is preparing to issue a fresh demand of around INR47 billion (USD692 million) which the regulator will require Vodafone India to either clear or provide bank guarantees for before the DoT will grant its approval for the merger. The new demand relates to Vodafone’s restructuring in 2015 when the company merged subsidiaries Vodafone East, Vodafone South, Vodafone Cellular and Vodafone Digilink into Vodafone Mobile Services. At the time, the DoT had asked Vodafone to clear one-time spectrum charges (OTSC) totalling INR66.8 billion, but following a legal challenge Vodafone was allowed to pay INR20 billion to clear the merger. DoT is also expected to seek bank guarantees for INR21 billion for Idea Cellular’s OTSC dues.