New telecom policy to check M&As

New Delhi, Nov 16 | Updated: Nov 17 2005, 08:19am hrs
The draft New Telecom Policy (NTP) 2005 proposes to check the abuse of dominance in telecom mergers and acquisitions.

It says, "Any M&A that reduces customer choice in any of the defined market segments to less than three or increases the combined entitys market share to over 50% in a specific segment would need specific approval from Trai (Telecom Regulatory Authority of India) and the licensor."

According to the draft NTP, an earlier decision by the group of ministers had permitted intra-circle mergers as long as there were at least three players in the market. The move was intended to ensure there was enough competition in the sector."The same principle can be extended to all forms of M&As in the industry," the draft said.

The NTP also aims to ensure efficient usage of spectrum by the operators in the wake of such M&As. It said, "The licensor would review at the end of 12 months following the M&A if the spectrum is being utilised efficiently.