The Telecom Regulatory Authority of India (TRAI) has floated a consultation paper to review various processes including the merger and acquisition (M&A) policy, payment of licence fee, various bank guarantees, spectrum trading and sharing process, among others. The regulator said: “It is important to identify the bottlenecks… that are making it difficult to do telecom business in India and thus, require regulatory intervention.”
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TRAI, in the paper, has sought the views of the industry on the M&A policy, which could help the ongoing merger process of the country’s second and third largest telecom operators — Vodafone India and Idea Cellular.
The Vodafone and Idea merger, if it goes through, will change the telecom landscape in the country, creating an entity with a revenue of over Rs 80,000 crore and a revenue market share (RMS) of 43 per cent, leaving behind market leader Bharti Airtel.
However, the Vodafone-Idea merger faces some challenges on the M&A policy front as the rules mandate that no operator can have more than 25 per cent of the total spectrum allocated in a circle and 50 per cent in a given band. Also, the RMS of a firm should not be over 50 per cent of the overall revenue market.