The Department of Telecommunications (DoT) is in favour of liberal merger and acquisition (M&A) norms to encourage consolidation in the 14-player market.
Prior to this, the Telecom Regulatory Authority of India (TRAI) had suggested that M&A norms be relaxed substantially and operators be allowed to merge their operations if the combined market share of the new entity is less than 60 per cent. The current ceiling is 40 per cent.
The regulator had further proposed that the spectrum caps be eliminated and said that post a deal, the combined entity be allowed to hold up to 25 per cent of the total available spectrum in that region.
Current rules allow the merged entity to retain only 14.4 MHz or units of spectrum, where they have to return the remaining amount to DoT and the regulator’s recommendations were aimed at allowing the combined entity to retain about 17-18 MHz in every region.
However, the DoT panel that examined TRAI’s recommendations had requested that the regulator’s proposals for a liberal M&A regime be rejected. DoT had asked the Telecom Commission to introduce new M&A norms which state that combined entity’s market cap cannot be more than 35 per cent.
DoT also wanted the spectrum cap tightened, on grounds that the spectrum held beyond the 10 MHz limit in metros and the 8 MHz in other regions be returned by the combined entity within 12 months.
