Department of Telecom could release much-awaited mergers and acquisitions (M&A) guidelines of telecom companies by this month-end. “The M&A guidelines will be out within a week or 10 days,” Telecom Secretary M.F. Farooqui told journalists here on Wednesday.
The Empowered Group of Ministers (EGoM), which is looking into the issue has approached Law Ministry seeking opinion on whether consolidation of companies would amount to sale of equity, thus violating telecom licence conditions related to lock-in period.
As per the guidelines approved by the EGoM, the market share of a merged entity should not exceed 50 per cent. Telecom companies that bought spectrum in auctions will not have to make additional payments to the government for radiowaves after a merger. Only companies that acquire telecom operators that had been allocated spectrum will have to pay the difference between the market rate and the old rate to the government.
“Auction is one way of acquiring spectrum. We are working on number of ways in which spectrum can be acquired. M&A will serve as another way in which spectrum can be acquired…The M&A policy will be finalised at the DoT level and won’t need to be placed before the EGoM again,” Mr. Farooqui said.
