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Journalism of Courage
The government plans to announce the long-awaited mergers and acquisitions guidelines by this month end,paving the way for consolidation in the telecom sector.
I am sure that before July 31,the policy will be in place, law and telecom minister Kapil Sibal said on the sidelines of a roundtable on Legal System organised by industry chamber Assocham.
The Indian telecom sector currently has around 13 mobile service providers with some of them expected to go for consolidation once the final guidelines are in place.
Telecom operators are talking to each other. There are three Indian service providers that are looking for significant stake sale but waiting for clear guidelines, said an executive of telecom company,who did not wish to be identified.
Although the telecom ministry had announced broad guidelines for mergers and acquisitions in February last year,the detailed guidelines are yet to be unveiled.
The guidelines that have been approved in principle include expeditious approval to merger proposals of telecom companies if their combined market share is up to 35 per cent. It will seek sector regulator Trais recommendation in case the resultant entity has market share between 35 to 60 per cent.
The government has de-linked spectrum from new licences and both have to be procured separately. Consequent upon the merger of licences,the total spectrum held by the resultant entity should not exceed 25 per cent of the spectrum assigned to it in the concerned service area in case of GSM services.
