India's telecommunications regulator Tuesday recommended the easing of regulations to support mergers and acquisitions in the sector, which is reeling under the impact of falling call rates amid intense competition.

The Telecom Regulatory Authority of India recommended to the government that mergers and acquisitions in the sector be allowed provided there are at least six players after any deal in a specific service area, Chairman J.S. Sarma told reporters at a news conference.

The merged entity can't have more than 30% of the total user base in a service area, Sarma said.

India is divided into 22 telecom service areas, with each area having between nine and 14 operators.

As per existing rules, a company can't hold more than a 10% stake in another company that has operations in the same service area.