After the deal between Spice and Idea, the merged entity faces a loss of Rs 842.75 crore, recently paid by the two companies as entry fees to obtain universal access service licences (UASL) in circles which overlap between Spice and Idea.
The issue relates to the intra-circle M&A norms issued by government on April 22, 2008, which prohibits intra-circle mergers for a period of three years. This restriction read with the 10% cap on cross-holding means that circles in which either Spice or Idea were already holding licences cannot merge with or add additional spectrum till July 2011.
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