India’s Department of Telecommunications (DoT) will approve Vodafone India’s merger with Idea Cellular if the companies pay a combined cost of INR71.7 billion ($1.04 billion) in spectrum-related charges, The Economic Times (ET) reported.
Its demand includes INR39 billion in cash from Vodafone and a INR33 billion bank guarantee from Idea Cellular. Media reports suggest the terms are likely to be challenged, further holding up the already delayed deal.
The sum is more than the DoT was rumoured to be seeking. In late June, reports emerged the regulator was set to ask for INR47 billion from Vodafone to settle a long-standing spectrum payment dispute and INR21 billion in bank guarantees from Idea Cellular, also for spectrum costs.
ET’s sources said at least the Idea Cellular portion of the charge was likely to be challenged: a similar levy slapped on Bharti Airtel as a condition of its Telenor India acquisition was later quashed by the country’s Supreme Court.
The deal between Idea Cellular and Vodafone India, struck in March 2017, is already beyond the original deadline of 30 June following delays getting the agreement through regulators. Over the last year, all other required authorities have passed the merger, which would create a new market leader by connections in India.