According to MF Farooqui, secretary, Department of Telecommunications, the government is likely to issue merger and acquisition (M&A) guidelines for the telecom sector within the next 10 days.
The guidelines have been approved by the Empowered Group of Ministers (EGoM), however, the group has sought legal opinion on whether consolidation of companies would amount to sale of equity, violating the lock-in period rule of the telecom licence.
As per the guidelines approved by EGoM, the market share of a merged entity should not exceed 50 per cent. Farooqui has stated that the final M&A guidelines are not going to have an impact on operators who have won spectrum in the third round of the spectrum auction as such operators will not have to make additional payments to the government following a merger.
However, companies acquiring operators who have been allocated spectrum earlier will have to pay the government the difference between the current market rate and administrative price of the spectrum acquired.
