TRAI Seeks Public Views To Fast-Track, Simplify M&As In Telecom Sector

Telecom regulator TRAI invited public comments to reform merger and acquisition rules in the sector, to simplify and expedite the process and avoid litigation.

The Telecom Regulatory Authority of India (TRAI) issued a consultation paper on reforming the guidelines for transfer and merger of telecom licences following reference from the Department of Telecommunications (DoT) to simplify and fast-track approval for mergers and acquisitions (M&As).

The National Digital Communication Policy (NDCP) 2018 under the ‘Propel India’ mission envisages to reform the existing M&A rules to enable simplification and to fast-track approvals to catalyse investment for the digital communications sector.

“A consultation paper has been released providing the background information and seeking inputs of the stakeholders on reforms required to be made in the existing guidelines on transfer/merger of licences to enable simplification and fast-tracking of approvals.” TRAI said in a statement.

The DoT has said that in many merger proposals, the entities have filed petitions before telecom tribunal TDSAT to quash and set aside certain conditions imposed upon them by the telecom department.

“Hon’ble TDSAT on several occasions has granted stay to the operation of some of such conditions. This has resulted in uncalled for delays in mergers being taken on record,” Trai said.

The regulator has also sought opinion on M&A in case of virtual network operators, who operate in partnership with telecom operators but don’t have a permit to install core network elements that connect two telecom networks.

In India, the telecom operators have the option of engaging with a mobile virtual network operator (MVNO), even in the case of merger where it might exceed the market share of 50 percent.

The existing guidelines do not provide for mandatory access to MVNOs.

“However, in such cases, a mere enabling provision in the guidelines may not be sufficient, and a detailed and elaborate procedure needs to be codified for matching harm with remedy and laying down key commercial principles and charges for the provision of wholesale access to MVNOs,” TRAI said.

The current M&A rules allow amalgamation of companies not exceeding 50 percent market share in a service area. The rule limits total spectrum held by the merged entity to 35 percent of the total spectrum assigned for access services and 50 percent of the spectrum assigned in a given band in the concerned service area.

Also, the combined spectrum holding in the sub-1 GHz bands — 700 MHz, 800 MHz and 900 MHz bands — by the resultant entity shall not exceed 50 percent of the total spectrum assigned in the sub-1 GHz bands, by way of auction or otherwise, in the concerned service area.

The regulator also noted that wordings in policy with expressions like “and if otherwise” also leads to ambiguity and litigations which need to be simplified.

Last date for the comments is October 18 and for counter comments November 1.―Business Standard