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This is an archive article published on February 22, 2004

Guidelines for intra-circle telecom M&A announced

The government on Saturday issued final guidelines for mergers and acquisitions within a telecom circle with the condition that the market s...

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The government on Saturday issued final guidelines for mergers and acquisitions within a telecom circle with the condition that the market share of merged entity would not exceed 67 per cent. ‘‘In order to ensure that sufficient competition exists, merger of licences will be permitted subject to the condition that, post merger, there are at least three operators in that service area for that service,’’ the guidelines issued by the DoT said.

The merger of licences is restricted to the same service area and this would be effective only in the fixed and mobile telephones. According to the guidelines issued by the government today: ‘‘With a prior approval of DoT, merger of licence is permitted in categories — cellular licence with cellular licence, basic with basic, unified with unified, basic with unified and cellular with unified,’’ it said. This means in case of a merger of basic service licence with unified licence, the basic licencee would have to pay the difference in entry fee at the time of application of merger.

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