TRAI suggests reforms in transfer, merger norms for telecom licenses

In a bid to reform norms for transfer and merger of telecom licences, the Telecom Regulatory Authority of India (TRAI) recently suggested that while both subscriber base and revenue are considered in determining market share for mobile and internet service providers, only revenue should be taken into account in market share calculation for other services such as national and international long distance telephony.

Further, the regulator also suggested that the one-year timeline which is currently allowed for transfer/merger of licenses in different service areas after National Company Law Tribunal (NCLT) nod should exclude time spent by companies in pursuing any litigation on account of which the final approval of a merger is delayed.

TRAI recommended that the guidelines on transfer/merger of licences should not ‘hard-code’ i.e. explicitly specify the spectrum caps. Instead, it should be linked with the relevant clause of the licence.

As per TRAI, the computing market share of an NSO (Network Service Operators) in the relevant market, market share of the VNO (virtual network operator) parented with it should be added to the market share of NSO, if the NSO is a promoter of VNO.

Another provision of the acquisition guidelines which provides an exemption from substantial equity/cross holding clause for a period of one year or more should be modified such that the said exemption is provided only for a period till transfer/merger of licence is taken on record by the licensor (Department of Telecommunications), TRAI recommended.