Trai liberalises M and A norms for telcos

“Keeping in view the current context and also the international practice as well as the provisions of the Competition Act, the Authority recommends that upto level of 35 per cent market share, for the resultant entity... as the green line or safe harbour,” Trai said

To ensure a level-playing field among service providers, Trai in its recommendations to the Telecom Ministry has said that if a resultant entity after merger or acquisition commands up to 35 per cent market share, the merged or acquired company would be considered in ‘green line’ or safe harbour.

This will be considered by the Telecom Ministry while finalising the National Telecom Policy 2011 which is expected to be released by the year-end and early next year.

“Those falling above 35 per cent and up to 60 per cent would be referred to Trai  which would carry out detailed examination to ensure that there would not be any abuse of market dominance,” the regulator said. Cases where the resultant entity would have more than 60 per cent market share would “not be considered as all”, as these would fall beyond the “Red Line”, it said.

The limit for spectrum holding by the resultant entity would be 25 per cent of the spectrum assigned in a service area.

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