Telecom Mergers and Acquisitions guidelines within 10 days, says Telecom Secretary
March, 06th 2014
The much-awaited guidelines for mergers and acquisitions of telecom companies are expected to be in place within 10 days.
"The merger and acquisition guidelines will be out within a week or 10 days," Telecom Secretary MF Farooqui said at the CII Broadband Summit in New Delhi.
The Empowered Group of Ministers (EGoM), which has approved the guidelines, has sought legal opinion on whether consolidation of companies would amount to sale of equity, violating the lock-in period rule of the telecom licence.
As per the guidelines approved by the EGoM, the market share of a merged entity should not exceed 50 per cent.
Telecom companies that bought spectrum in auctions won't have to make additional payments to the government for radio-waves after a merger.
Only companies that acquire telecom operators that had been allocated spectrum will have to pay the difference between the market rate and the old rate to the government.
"Auction is one way of acquiring spectrum. We are working on number of ways in which spectrum can be acquired. M&A will serve as another way in which spectrum can be acquired," Mr Farooqui said.
Bharti Airtel, India's biggest mobile services company by subscribers yesterday said it would buy the business and assets of Loop Mobile in Mumbai.
Under the proposed transaction, Loop Mobile's 3 million subscribers in Mumbai will join Airtel's over 4 million users, making it the largest network in the metropolitan city.
Loop Mobile's 2G-enabled network will also become a part of Airtel's network.