The Telecoms Regulatory Authority of India (TRAI) has reportedly put forward proposals for an increase in the caps on market share and spectrum holdings for merged entities, Bloomberg reports. It is understood that the regulator has suggested that mobile network operators be allowed to merge operations if their combined market share is less than 60% in a circle; under existing legislation cellcos are prevented from tie-ups if the combined share would exceed 40%. As part of the proposals it has also been noted that approval would be automatic for tie-ups which create an enlarged entity with less than a 35% market share, while a merger creating a company with between 35% and 60% market share will be subject to examination by the Department of Telecommunication (DoT). The TRAI meanwhile has also suggested that the cap on bandwidth holdings in a single calling circle be lifted to 25% for merged entities.
The DoT, it is claimed, hopes to have the new regulations approved by the Union Cabinet before the end of this year, and commenting on the development telecoms minister R. Chandrashekhar noted: ‘It is a priority for the government to remove roadblocks to consolidation, which currently exist … Every company can plan their long-term investments and their business strategy knowing that this is the direction in which the country will go.’