Idea Cellular Ltd, India's third-biggest cellular carrier by revenue and users, has decided to challenge DoT’s order directing it pay a penalty of  Rs. 600 crore in penalties for for alleged violation of terms and conditions of CMTS /UAS licenses while acquiring erstwhile Spice Communications Limited in 2008.

“Idea is preparing to take necessary steps to challenge the DoT letter at appropriate forum", Idea said in a filing to the stock exchanges.

Five years ago Idea agreed to buy smaller rival Spice Communications in a three-way deal that also gave Malaysia's Axiata about a fifth of Idea. Idea currently runs Spice operations in two zones as part its own operations.

The erstwhile Spice Communications Limited (Spice) was amalgamated with Idea effective March 01, 2010, after approval of company merger by Gujarat High Court and subsequently by Delhi High Court.

The government is of the view that Idea violated rules as it held permits in zones where Spice had operations. Indian rules then prohibited companies to own 10 percent or more in a competing carrier in the same zone.