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Currently, single spectrum charges are calculated from the date of NCLT approval.
New Delhi: The Telecommunication Regulatory Authority of India (Trai) on Friday proposed that the telecommunications department modify its mergers
The regulator said that companies should be invited to pay non-recurring spectrum charges calculated from the date of the final DoT approval for the remaining license term and not from the date of the NCLT's approval.
DoT should calculate the provisional application from the date of approval of the NCLT and, after the approval of the merger, the actual demand will be recalculated according to the date of grant of the approval, t The proposed regulator. This is because the government raises the demand for these charges before giving the final approval.
The surplus paid by the resulting merged entity, if any, must be repaid or offset against other contributions, said Trai.
If the government accepts the Trai proposal, the merged entity of Vodafone India and Idea Cellular will receive a refund if it ends up paying DoT's cash demand of 3,900 billion crore for non-recurring spectrum charges
a conditional approval letter for the merger with a claim of ₹ 3,900 crores in cash for the non-liberalized spectrum transfer from Vodafone to Idea for hertzian waves up to 4.4 megahertz (MHz) and ₹ 3,300 crores of bank guarantee for non-recurring spectrum charges given the non-liberalized spectrum of Idea beyond 4.4 MHz
M & A guidelines state that non-recurring spectrum charges to be paid by the acquirer due to the transfer of airwaves up to 4.4 MHz from the acquired company to the resulting merged entity are to be calculated on the basis of the difference between the entry price and spectrum price determined by the market from the date of approval of these arrangements by NCLT in proportion to the remainder of the period of validity of the license
Non-spectrum charges recurring are payable by companies wishing to convert their managed spectrum or spectrum not purchased into a liberalized or auctioned spectrum auction. Auctioned spectrum can be deployed flexibly, unlike the spectrum being administered.
"If this change in the M & A guidelines is accepted by the government, it means that companies will no longer be penalized for regulatory and bureaucratic delays. It would also mean that the merged entity of Vodafone and Idea could receive some government money in case it would accept the government's demand for contributions. TRAI and DoT correctly identified the discrepancy in the M & A guidelines and reached a consensus on the best way to deal with them so that companies are not charged in excess, "said Saurav Kumar, partner at IndusLaw [19659012]. November sent DoT its recommendations on "the ease of doing business in the telecom sector" under which it proposed that non-recurring spectrum charges be calculated from the date of written approval of the merger licenses. DoT then asked Trai to reconsider its point of view and suggested that DoT raise the claim with the acquiring company of those fees as of the date of NCLT's approval, with a stipulation that this request is revised after approval of the transfer of licenses by DoT. Trai has now supported DoT's views and proposed the change in merger standards.
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