Easy on the M&A

AsiaBlog
AsiaBlog
AsiaBlog
6/24/2010

9:00 PM -- The Indian government is likely to issue new merger-and-acquisition rules within the next year, according to an industry source.

And that's a move that could have a significant impact on the telecom services market.

With up to 12 operators in each of India's 22 circles, consolidation in the industry is inevitable. And the industry has been urging the Department of Telecommunications (DoT) to rework the M&A rules to make it easier for the carriers to get married.

But India's telecom regulator isn't helping the cause much. The Telecom Regulatory Authority of India (TRAI) recently recommended that, should consolidation take place, no single player should hold more than 30 percent market share, a stipulation that would rule out any mergers among the larger incumbents. The regulator also recommended spectrum caps of 14.4MHz for GSM operators and 10MHz for CDMA operators, and that any mergers should also be subject to one-time charges related to the transfer and use of spectrum.

It seems, though, that the TRAI's recommendations are likely to be revised. "There will definitely be changes in the recommendations made by TRAI last month," says one industry source on condition of anonymity. "There is a limitation on the amount of spectrum a merged entity can own, which is likely to discourage the operators from going for a merger or acquisition. This is likely to reworked before being implemented," adds the well placed source.

— Gagandeep Kaur, India Editor, Light Reading

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