A Department of Telecommunications (DoT) panel has accepted most of the Telecom Regulatory Authority of India (TRAI)?s recommendations pertaining to merger and acquisition (M&A) rules.
It is believed that these recommendations will be a part of the new telecom policy, which is expected to be ready by August.
TRAI had suggested the merged entity should not have more than 30 per cent market share in any circle, in terms of subscribers and adjusted gross revenue. The present cap is 40 per cent.
Also, it should not hold more than 14.4 Mhz spectrum for GSM services and 10 Mhz for CDMA services. TRAI has proposed that the additional spectrum be returned.
Currently, a combined entity can have up to 40 per cent market share in a circle and retain the entire spectrum (of the two merged entities), provided it fulfils the subscriber criterion within three months. Otherwise, the excess spectrum has to be returned.
There is also a three-year lock-in period. The DoT panel has accepted TRAI?s suggestion that this be eliminated. Instead, TRAI has recommended that a promoter should not be permitted to dilute equity below 51 per cent for five years or until the rollout conditions are met.
Another recommendation is charging a one-time fee to operators holding more spectrum than was mentioned in their contracts. The policy also proposes allowing companies to share spectrum.
TRAI believes that the policy will ensure better use of resources.
