Idea Cellular could float a new company to operate in the Karnataka and Punjab circles. The company board today gave its in-principle approval to demerge the unified access service licences (UASL) of Punjab and Karnataka.
The move is primarily meant to avoid overlapping of spectrum allocated after the company acquired B K Modi’s Spice Communications. Over the past few months Idea Cellular had come under fire due to the regulatory issues involving the overlapping of the licences held by the company after the acquisition.
According to the law, telecom companies in India are not allowed to hold more than a 10 per cent stake in two different licence-holding companies in the same circle. DoT had therefore asked the company to surrender one of the licences held by the company.
Idea had responded by saying it is willing to demerge its licences in Punjab and Karnataka circles into a separate entity, where it would not
hold more than a 10 per cent stake.
Idea also said if DoT did not accept this option, it was willing to surrender either one of the licences issued to it in January. Spice Communications, which provides GSM-technology mobile services, holds licences for Karnataka and Punjab. But Idea also has licences for these two circles effective January 25, 2008. Similarly, Idea Cellular has licences for the Delhi, Andhra Pradesh, Haryana and Maharashtra circles. Spice also holds licences in these circles effective January 25, 2008.
