Paving way for consolidation, the Telecom Commission has accepted liberal norms of up to 35 per cent market share for merger and acquisitions in the Indian telecom sector, which has 12-13 players in a circle.
“(TRAI) recommendations with the cases of below 35 per cent market share (and) spectrum not exceeding 25 per cent of the total spectrum are cleared and above that we will be requesting TRAI to suggest some guidelines for considering cases where the market share may be 35 per cent,” Telecom Secretary, Mr R. Chandrasekhar, said.
TRAI had recommended that if an entity, post a merger or acquisition, has up to 35 per cent market share, it would be considered in ‘green line' or safe harbour.
“We have taken the note of the TRAI recommendations that it can be up to 60 per cent, the commission has not taken any specific view on a upper cap but we will be asking TRAI to work out some suitable guidelines so that there is a transparency in the process,” Mr Chandrasekhar said.
Above 35 per cent but less than 60 per cent would be referred to TRAI, which will carry out detailed examination to ensure that there is no market dominance abuse, TRAI had recommended.
On spectrum sharing too the telecom commission has accepted TRAI's recommendations which says that spectrum sharing would be permitted between any two licensees holding spectrum subject to the condition that the total bandwidth 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, TRAI had said.
Now the government has to take a decision on telecom commission's recommendations, Mr Chandrasekhar added.