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DoT nod mandatory for telecom merger

NEW DELHI: The Centre has made prior approval of the Department of Telecommunications (DoT) mandatory for merger of telecom licences, where the merger will be restricted to the same service area (telecom circle). It has also said that mergers would be allowed provided that at least four service providers remained present in a circle, while no operator would be allowed to transfer fresh spectrum or radio frequency allocated to it for three years from the date of issue.

Issuing the revised guidelines for intra-service area merger of ‘Cellular Mobile Telephone Service’ (CMTS) and ‘Unified Access Service’ (UAS) licences, the Government said any permission for merger would be accorded only after completion of three years from the effective date of the licences.

Similarly, post-merger, the combined market share of the merged entity cannot be greater than 40 per cent.

The Government has revised the guidelines keeping in mind the recommendations forward by the Telecom Regulatory Authority of India (TRAI) in October last year.

Following the merger, the entity will be entitled to the total amount of spectrum held by the merging entities, subject to the condition that both the licensees will meet within three months from the date of approval of merger. In case of failure to meet the spectrum allocation criterion separately for GSM and CDMA in three months, the post-merger licensee should surrender the excess spectrum.

Merger of licences would be permitted in the following categories — CMTS licence with CMTS licence; UAS licence with UAS licence; and CMTS licence with UAS licence. Merged licences in all the categories above should be in the UAS licence category only, it said.

On merger, spectrum enhancement charge would also be charged as applicable in the case of any other UAS/CMTS licensee, while the duration of the licence of the merged entity, would be equal to the remaining duration of the licence of the two merging licensees (whichever is less on the date of merger).

Similarly, discretion to choose the band to surrender the spectrum beyond the ceiling will be with the new entity.

All dues, if any, relating to the licence of the merging entities, in that given service area, will have to be cleared by either of the two licensees before issue of permission for merger of licences.

In case consequent to merger of licences in a service area, the licensee becomes a “significant market power” (SMP) post-merger, then the extant rules and regulations applicable to SMPs would apply to the merged entity.

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