Trai calls for consultation on merger and acquisition policy

By: |
New Delhi | Published: March 15, 2017 5:27:07 AM

In a bid to identify issues impacting the ease of doing business in the telecom sector, the Trai has floated a consultation paper to review various processes including the M&A policy, payment of licence fee, various bank guarantees, spectrum trading and sharing process, among others.

Trai, in the consultation paper, has sought the views of the industry on the M&A policy. (Reuters)

In a bid to identify issues impacting the ease of doing business in the telecom sector, the Telecom Regulatory Authority of India (Trai) has floated a consultation paper to review various processes including the merger and acquisition (M&A) policy, payment of licence fee, various bank guarantees, spectrum trading and sharing process, among others.

The regulator said, “It is important to identify the bottlenecks, obstacles or hindrances that are making it difficult to do telecom business in India and thus, require regulatory intervention.”

Trai, in the consultation paper, has sought the views of the industry on the M&A policy, which could help the ongoing merger process of the country’s second and third largest telecom operators — Vodafone India and Idea Cellular — announced in January this year.

You may also like to watch:

The merger of Vodafone and Idea, if it goes through, will change the telecom landscape in the country, creating an entity with a revenue of over R80,000 crore and a revenue market share (RMS) of 43%, leaving behind current marker leader Bharti Airtel.

However, the Vodafone-Idea merger faces some challenges on the M&A policy front as the rules mandate that no operator can have more than 25% of the total spectrum allocated in a circle and 50% in a given band. Also, the RMS of an operator should not be more than 50% of the overall revenue market.

Do you know What is Repo Linked Lending Rate (RLLR), Wholesale Price Index (WPI), Public Debt, Finance Commission Grants & Other Transfers, Economic Survey? FE Knowledge Desk explains each of these and more in detail at Financial Express Explained. Also get Live BSE/NSE Stock Prices, latest NAV of Mutual Funds, Best equity funds, Top Gainers, Top Losers on Financial Express. Don’t forget to try our free Income Tax Calculator tool.