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TRAI Eases Mergers and Acquisition Norms
Friday, 04 November 2011, 17:13 IST
New Delhi: The Telecom Regulatory Authority of India (TRAI) Thursday made proposals to ease mergers for companies having market shares of up to 35 percent, but added that mergers will not be allowed if the resulting company has over 60 percent market share.
"TRAI has recommended that up to the level of 35 percent market share for the entity, by way of subscribers or adjusted gross revenue AGR in a given service area, be considered as the green line or safe harbour which can be permitted by the government," the regulator said in a statement.
"Those falling above 35 percent and up to 60 percent would be referred to TRAI for its recommendation, who would carry out a detailed examination to ensure that there would not be any abuse of market dominance," it added.
However, the regulator also said that cases where the resultant entity would have more than 60 percent market share would not be considered at all, as these would fall beyond the red line.
"We have taken into consideration the current context, international experience, the conclusions of the Competition Act etc., and then we have done that," TRAI chairman J.S. Sarma told reporters.
The limit for spectrum holding by the resultant entity would be 25 percent of the spectrum assigned in a service area.
The regulator also said that spectrum sharing would be permitted between any two licensees, subject to the condition that the total spectrum so shared would not cross the permissible limit under mergers.
The permission would be for a period of five years, subject to renewal for one more term of five years.
The telecom department had asked the telecom regulator to make a fresh set of recommendations on mergerd and acquisitions or M&As, following Communications Minister Kapil Sibal's recent statement that the telecom sector is highly fragmented and requires consolidation.
TRAI had last made recommendations on mergers and acquisitions in May 2010.
Source: IANS
Source: IANS
