The Department of Telecom (DoT) is to relax M&A rules, smoothing the way to a market with as few as six operators per service area.
Sources cited by newspapers said that DoT minister Kapil Sibal had been heard explaining that each operator would be…
The Department of Telecom (DoT) is to relax M&A rules, smoothing the way to a market with as few as six operators per service area.
Sources cited by newspapers said that DoT minister Kapil Sibal had been heard explaining that each operator would be allocated upwards of 10MHz of spectrum, as part of proposals due to be announced in the New Telecom Policy 2011 consultation, expected this month. A national broadband plan may be unveiled at the same time.
Speaking at an industry conference, Sibal reportedly told delegates that the DoT wanted to implement a structure whereby investments would be protected in the event of M&A.
He was presumably referring to new entrants such as Uninor, Datacom, Sistema Shyam, Swan and Etisalat DB, which as the market’s smallest players are the most likely candidates for M&A. The companies expected to remain in the sector include home-grown giants Bharti Airtel, Reliance Communications, BSNL and Idea Cellular, as well as companies with international owners such as Vodafone Essar and Tata Teleservices.
They will be interested in the new entrants’ spectrum rather than their infrastructure, which would just replicate their own.
Until now, M&A has been made difficult by restrictions designed to stop the foreign owners of new entrants from simply flipping their assets.
Earlier this month, Sibal was reported to have asked mobile operators to sort out their differences about spectrum allocation.
Against the backdrop of the 2G scam, Sibal met with industry leaders to discuss regulatory changes and draft a new telecom policy.
He was quoted saying that companies should work together to ensure the industry is robust.
The government has drafted a strategic plan for the telecoms sector that includes spectrum sharing, M&A and the introduction of MVNOs.
The draft plan also involves the establishment of a committee to review the use of spectrum. Sibal set himself a 100-day deadline to announce the policy when he took office at the end of last year.
This comes as the Telecom Regulatory Authority of India (Trai) issued propositions about excess spectrum charges and spectrum prices.
In other news, Trai is expected to make recommendations on telecom infrastructure and manufacturing, in order to encourage telecom equipment makers.
J S Sarma, Trai’s chairman, was also quoted saying the regulator will float a consultation paper on next generation telecom networks within the next two to three months.
