To enable consolidation in the telecom
sector, the Telecom Regulatory Authority of India (TRAI) proposed to ease up
merger and acquisition norms.
As per the recommendation to the department
of telecommunications (DoT), the regulator said that merged entity could own up
to 25 percent of the spectrum in a given circle and it could have a combined
market share of up to 60 percent.
Earlier, TRAI suggested for bringing a
spectrum cap of 14.4 MHz on the merged entity. It was also in favour of
operators maintaining a combined market share of less than 30 percent.
The regulator has now said that if the
combined market share of the merged entity is below 35 percent then it can go
through without any approvals.
Mergers will be allowed if the market share
reaches up to 60 percent but subject to scrutiny by TRAI.
An operator like Bharti Airtel which has
market share of over 20 percent can acquire any of the new players or even
those with 10-15 per cent market share.
The merged entity can own larger quantum of
spectrum. The merged entity can also buy spectrum through an auction or any
TRAI has also scrapped its earlier proposal
to have at least six operators in each circle post a merger. The regulator said
the number of operators in a circle does not have any relevance.
There are nearly 13 operators in each circle
at present. As at the end of December 2009, seven major players had a share of
98.65 percent of the telecom market while six new players had a collective
share of 1.35 per cent. At the end of June 2011, the seven major players
continue to enjoy a significant share of 93.82 percent while the six new players
cumulatively have a share of 6.18 percent.
By Telecomlead.com Team