TRAI proposes to relax M&A guidelines
07 Nov 2011
The Telecom Regulatory Authority of India (TRAI) has proposed relaxations in the guidelines on mergers and acquisitions, which, if implemented, would help in facilitating a consolidation in the highly-competitive telecom market.
The sector regulator has recommended that mobile phone companies could merge their operations if the combined market share of the new entity is less than 60 per cent, an increase from the present 40 per cent ceiling.
Those companies whose market share falls above 35 per cent and up to 60 per cent would be referred to TRAI for its recommendations.
TRAI will conduct a detailed examination to ensure that there is no abuse of market dominance, according to draft regulations posted on its website.
For determination of market power, market share of both subscriber base and adjusted gross revenue of licensee in the relevant market will be considered, TRAI said.
In case the market share of the unified entity is less than 35 per cent, then the Department of Telecommunications (DoT), the licensor, alone can clear a deal.
