Advertisements for Vodafone India Ltd. and Idea Cellular Ltd. are displayed on a street in Mumbai, India (Photographer: Dhiraj Singh/Bloomberg)  

Vodafone-Idea Merger: Telecom Department Receives Legal Opinion On Demand For Vodafone Dues

The telecom department has received legal opinion on the issue of raising demand for dues pertaining to Vodafone, ahead of its proposed mega-merger with Idea Cellular Ltd. in India

The legal opinion had been sought by the Department of Telecom recently as some of the demands for arrears are sub judice, a senior government official told PTI. “Based on the legal opinion, the matter will be examined,” the official said.

The details of the legal opinion could not be ascertained.

The dues pertain to one-time spectrum charges on administratively-allotted radiowaves (that is, not allocated via auction) to Vodafone, which is in the process of combining its operations in India with Idea. Telecom Secretary Aruna Sundararajan had, last month, said that the clearances related to the merger are being expedited and that it “should get done” in the timeframe outlined by the two companies.

Idea and Vodafone have decided to combine their operations to create the country’s largest telecom operator worth over $23 billion, with a 35 percent market share.

Earlier this month, Idea announced that the telecom department approved raising the foreign direct investment limit in the company to 100 percent, clearing the last leg of regulatory clearance.

The merged entity would be known as Vodafone Idea Ltd. Vodafone will own 45.1 percent in the combined entity, while Aditya Birla Group would have 26 percent. Idea shareholders will own about 28.9 percent.