Sector watchdog the Telecom Regulatory Authority of India (TRAI) has published its recommendations on ‘Ease of Doing Telecom Business’, focusing primarily on issues related to licensing. These include: streamlining the approval process by making Standing Advisory Committee for Frequency Allocation (SACFA) clearance available through an online portal; granting Demonstration and Experimental Licences with a maximum of 15 and 30 days, respectively, and making Experimental Licences valid for six months initially and extending that period by a further six months.
Notably, however, the regulator made several recommendations regarding the merger and acquisition (M&A) process. The TRAI suggested that the Department of Telecommunications (DoT) should submit any objections to M&A requests within a maximum of 30 days. Further, the DoT should set out a timeline, also not exceeding 30 days, for the provision of written approval for the transfer of licences following an agreement’s endorsement by the National Company Law Tribunal (NCLT). This timeframe should be enshrined in the DoT’s M&A Guidelines policy. Regarding spectrum issues resulting from mergers, the regulator recommended that operators be given one year to trade or surrender excess spectrum if a merger or acquisition would cause them to hold more than the legal upper limit. The TRAI also suggested simplifying matters by allowing spectrum trading for all access spectrum bands that have been put to auction. As previously reported by TeleGeography’s CommsUpdate, prolonged delays in receiving final approvals for M&A led to the breakdown of the planned three-way merger of Reliance Communications, Aircel and Sistema Shyam TeleServices Limited (SSTL), whilst prior to that the acquisition of Loop by Bharti Airtel was also scuppered by regulatory delays.
Also of note was TRAI’s recommendation that the DoT devise a ‘suitable matrix’ to link financial penalties to the severity of an infraction and its recurrence. Following allegations of corruption at the ministry in 2012, the DoT began to impose the maximum penalties allowed for comparatively minor infractions in an effort to demonstrate that it was not colluding with industry players. This approached proved damaging to the industry and as each violation had to be challenged in the courts. Attempts to steer the DoT towards a more rationalised structure have so far proved unsuccessful.