Centre to revise exit policy for telecom firms

As part of the NDA government’s attempt to create investor friendly environment, the Department of Telecom (DoT) is working on formulating a new exit policy enabling the loss making telecom firms to sell its assets to existing players without much regulatory hurdles.

The DoT, which has been clearing several pending policy decisions including spectrum trading and sharing, is moving to reframe the exit policy allowing any telecom company to transfer its business to a existing company, along with all approvals and permissions granted within the licences”, sources from the DoT told Deccan Herald.

The DoT will fine-tune the policy at the earliest and seek the telecom watch dog Telecom Regulatory Authority of India (Trai) approval, sources added.  At present if an operator wanted to quit the telecom business, the firm has to surrender the licences or go through the merger and acquisition route.  Even if an operator acquires the operations of another player, the current policy says the firm has to seek fresh permission and authorisation from concerned bodies.

The telecom players have expressed their concern that this may disrupt services, as getting clearances are time consuming. While demanding the industry friendly exit policy, the industry body has been suggested the government take steps to allow the loss making company to quit the telecom business without losing out of the value it had created.

It may be noted that Bharti Airtel Limited move to purchase Loop Mobile in Mumbai was getting delayed due to stringent rules.

Though in 2012, the DOT wanted to formulate an exit policy, the telecom watch dog Telecom Regulatory Authority of India had rejected it.

Telecom Minister Ravishankar Prasad, who had earlier announced to create investor friendly environment, constituted a panel headed by the DoT Secretary to find a solutions to issues hurting the sector’s growth. Telecom Secretary Rakesh Garg is scheduled to hold a meeting with industry representatives here on Wednesday to discuss the industry problems.

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