Telecom M&A norms relaxed

The Telecom Commission has accepted Trai's recomme­ndations to re­lax rules for mer­gers and acqui­sitions (M&As) in the sector and allow spec­trum sharing among telcos, pa­ving the way for consolidation in the 14 player market. It is also open to the regulator's pro­posal to levy a one time fee on operators for holding spe­ctrum beyond 6.2 MHz. Mer­gers and acqui­sitions will get auto­matic clear­ance if the com­bined mar­ket share of the new entity is less than 35 percent and spectrum holding is less than 25 percent.

Trai had earlier suggested that M&As be allowed in the industry if the combined mar­ket share of the new entity is less than 60 percent. The move will pave the way for consoli­dation in the industry, where a number of new entrants are yet to make a mark despite millions of Indians start using mobile phones every month. It is esti­mated that they may have to shell out more than Rs 17,500 crore as one-time fee on excess spectrum, based on Trai's reco­mmendation of a fee of Rs 4,571.87 crore on each mega hertz beyond 6.2 MHz.