TRAI doubles operator cross-holdings to 20-per cent for telecom M&As
30 August 2007
The Telecom Regulatory authority of India (TRAI) has come out with M&A guidelines. It has increased operator cross-holdings to 20 per cent from 10 per cent and has made recommendations on spectrum charges.
According to TRAI''s recommendations, the ceiling on the number of licenses or operators in a circle is unlikely though the pan India service providers and GSM operators may be in for negative news. Reliance Communications, on the other hand is a likely beneficiary as TRAI has allowed operators to operate in multiple service technologies.
TRAI has also made it clear that the dominance of market players should not be more than 40 per cent if a merger takes place, which gives a clear indication that the telecom regulator does not want leading service providers to merge.
It also means that smaller operators like Spice, Idea and Aircel will become the M&A targets for the bigger players.
TRAI has also said that no M&As will take place in circles, which have less than four operators.
The M&A dominance criteria will now be based on subscribers and AGR. The 15 Mhz ceiling has also been removed in case of M&As.