Bharti welcomes Trai recommendations on M&A, spectrum sharing

PTI New Delhi | Updated on November 04, 2011

Terming Trai’s latest set of recommendations as “balanced”, telecom major, Bharti Airtel, on Friday welcomed the sectoral regulator’s proposal for liberal norms with respect to mergers and acquisitions and spectrum sharing.

“Prima—facie, I would say that these seem to be very balanced recommendations. In particular, I would like to talk about spectrum sharing, M&A norms, which seem very lucrative,” Bharti Airtel CEO India and South Asia, Mr Sanjay Kapoor, told reporters here.

Yesterday, in its reply to the Department of Telecom’s (DoT) request for clarifications on proposed norms for mergers and acquisitions and spectrum related issues, the Telecom Regulatory Authority of India (Trai) had suggested a liberal norm of up to 35 per cent market share as a “safe harbour” for mergers and acquisitions in the Indian telecom sector, which has as many as 12—13 service providers operating in some circles.

To ensure a level playing field among service providers, it added that if a resultant entity after merger or acquisition commands between 35 per cent to 60 per cent market share, Trai would look into the case to ensure that there is no abuse of market dominance.

Further, Mr Kapoor added that the step to incentive operators for roll out in rural areas was an encouraging step and said the focus on rural connectivity would help take telecom to the remotest parts of the country.

“What is very encouraging is the entire rural roll out incentive that the regulator wants or is recommending for the sector. We believe what USO has not been able to do over the last many years, this single recommendation is capable of, or has a potential of doing,” he said.

Trai’s recommendations should encourage all serious operators to look at how to reach telephony to the hands of people living in villages which have a population of 500 or 1,000, which they would otherwise refrain from, he added.

Trai has suggested replacing the existing urban—centric roll—out obligations by revised norms applicable to all CMTS and UAS licenses.

As an incentive, it has recommended progressive reduction of the USOF component of licence fees, starting from 0.5 per cent for the achievement of two years’ roll—out obligations and extending up to 4 per cent in the event of coverage of all villages with population of 500 to 2,000 people.

Published on November 04, 2011

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