Telecom M&A guidelines need to be reworked: TRAI

By PTI
22 September, 2014

With a view that the country cannot carry on with 12 telecom operators, sectoral regulator Trai today said current merger and acquisition (M&A) rules need to be reworked by the government for any pick up in consolidation activity.

“No jurisdiction in the world has 12 operators, mostly the countries have 5 or 4 telecom players and at some places 2. For this to happen (here) merger and acquisition guidelines have to be reworked,” TRAI chairman Rahul Khullar said here.

The Chairman of Telecom Regulatory Authority of India (TRAI) said the guidelines have been a non-starter as M&A activity has not taken place despite the industry being in dire need for consolidation.

“I think the industry is in dire need of consolidation, its simply just cannot carry on like this with 10-12 operators, some of them bleeding to death and it has to stop,” Khullar said.

Telecom operators have long been demanding changes in the M&A rules, terming them difficult.

Vodafone India chief Marten Pieters had earlier said that companies should be allowed to buy assets of a particular firm such as spectrum and not the entire firm which has a lot of debt in its books.

Giving an example, Pieters had said, “We love to buy 3G spectrum but for 3G spectrum, if I have to buy complete operator who has 3G spectrum … It comes with all kinds of stuff I don’t want because I have it all. So, it is very difficult to make an attractive proposition in such a situation.” 

Easing the M&A rules, the government had allowed mergers between firms with up to 50 per cent combined market share.

Earlier, telecom firms were allowed to merge if their combined market shares in terms of subscriber base does not exceed 40 per cent in any of the nation’s 22 circles or zones.


Leave Your Comment
TRAI Proposes New M&A Guidelines

TRAI Proposes New M&A Guidelines

Reuters 6 years ago
The Telecom Regulatory Authority of India (TRAI) on Thursday proposed a relaxation of guidelines for mergers and acquisitions in the sector that if implemented by...
TRAI may review telcos' freedom to fix call rates, moots extension of DTH licences

TRAI may review telcos’ freedom to fix call rates, moots extension of DTH licences

PTI 3 years ago
Telecom regulator Trai today warned that it will review service providers’ freedom to fix mobile call and service rates if they increase tariffs beyond the...
Easier M&A Rules Get Telecom Commission's Nod

Easier M&A Rules Get Telecom Commission’s Nod

Reuters 6 years ago
The Telecom Commission has not ruled out levying a one-time fee on operators holding spectrum beyond 6.2 mega hertz and favours an auction-based pricing for...
No Comments

Telecom M&A guidelines need to be reworked: TRAI

Powered by WordPress.com VIP