The Hindu Business Line : DoT approves norms for intra-circle mergers

THE Department of Telecommunications (DoT) has given its green signal for intra-circle mergers and acquisitions subject to the condition that there are at least three operators within the telecom circle, and the market share of the merged entity does not exceed 67 per cent.

According to an official statement, the guidelines for intra-circle mergers that have been issued will further contribute towards efficient utilisation of resources, serving the consumer interest in particular and public interest in general.

As per the guidelines, merger in the same service area has been divided into two distinct categories — fixed and mobile services. While merger of companies holding different service licences is permitted, a standalone basic service licence cannot be merged with a standalone cellular service licence and vice versa.

In other words, with prior approval of the DoT, merger of licences is permitted in the following categories — cellular licence with cellular licence; basic licence with basic licence; unified access service licence (UASL) with unified access service licence; basic with unified access service licence and cellular with unified access service.

"In case of a merger of a basic service licence with UASL, the basic service licensee shall pay at the time of application for merger, the difference of amount of the entry fee, if any, as per guidelines for migration to UASL dated 11 November 2003," the guidelines said.

In order to ensure that sufficient competition exists, merger of licences be permitted subject to the condition that, post merger, there are at least three operators in that service area for that service. UASL will be counted for basic as well as cellular service separately while deciding the number of operators in a given service area.

Consequent upon the merger of licences, the merged entity shall be entitled to the total amount of the spectrum, held by the merging entities, subject to the condition that after merger, the amount of spectrum shall not exceed 15 MHz per operators per service area for metros and category A service areas and 12.4 MHz per operator per service area in category B and category C service areas.

Subject to these limits, the merged spectrum will remain with the merged entity and would be treated as a starting point for further allocation and revision as per the detailed spectrum guidelines to be issued separately.

The guidelines on efficient utilisation of spectrum and its pricing shall be applicable. Discretion to choose the band to surrender the spectrum beyond the ceiling will be of the new entity.

The spectrum utilisation charges beyond 10+10 MHz for GSM-based system and 5+5 MHZ for CDMA-based system is to be prescribed separately. The merged entity will have to pay the prescribed charges from the date of merger of licences. These guidelines can be reviewed after a period of one year or earlier if warranted.

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