M&A in telecos gets Trai nod

May 12, 2010 |

New Delhi, May 11: With rock-bottom tariffs making operations unviable, telecom regulator Trai on Tuesday recommended ending the restrictions preventing telecom firms from selling majority stakes in the first three years of getting a license.

This will help consolidation by allowing mergers and acquisitions in the world’s fastest growing telecom market, which has been adding 15 million users a month.
This recommendation needs to be approved by DoT to be made a law.
India has 584 million mobile telephone users and there are 15 telecom firms.
The entry of nine new players in 2008 made the cost of operations unviable and with Trai waiving the lock-in period for M&As, new firms may get to exit at a premium.
Such mergers and acquisitions would be subject to the merged entity having a market share not above 30 per cent in terms of subscriber base, as well as adjusted gross revenue, the regulator said. — PTI

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