TRAI for unlimited number of telecom players

New Delhi, Aug 29: In a wide ranging reform measures forwarded to the government that would intensify competition and reduce phone tariffs, the telecom regulator TRAI today said there should be no limit in the number of players in each circle and outlined strict guidelines on mergers and acquistions in the country's telecom sector, the fastest growing in the world.

Giving its verdict on the reforms in the telecom licensing policy, the telecom regulator today said there should be no cap on the number of access providers.

On mergers and acquisitions (M&A), TRAI said the market share of the merged entity should not exceed 40 per cent, either in terms of the subscriber base or revenue from the existing 67 per cent.

No M&A activity will be allowed if the number of wireless access service providers reduces below four in the relevant market, consequent to such an M&A activity under consideration.

TRAI added that the acquisition of equity capital of up to 10 per cent of the target licensee's enterprise will be permitted by an automatic route and anything beyond that up to 20 per cent of the equity holdings of the target licensee company, will be approved on a case-by-case basis and the process of such approvals will be based on the M&A guidelines contained in these recommendations.

It also raised the cap on equity capital from 10 per cent to 20 per cent, up to which a telecom player can acquire stake in another telcom firm in the same service area.

Any licensee wishing to get additional spectrum beyond 10 MHz in the existing 2G bands that is 800 MHz, 900 MHz and 1800 MHz after reaching the specified subscriber numbers will have to pay a one-time spectrum charge, it said. The service provider will have to pay Rs 16 crore as a one-time spectrum acquisition charge for one MHz allotment in Mumbai, Delhi and Category A service areas.

All spectrum excluding 800 MHz, 900 MHz and 1800 MHz bands should be auctioned in future so as to ensure efficient utilisation of this scarce resource.

On the issue of access providers using a combination of CDMA and GSM technology, the regulator said the existing license should be permitted to provide services through either of the technology, subject to certain conditions.

The roll-out obligation for the access providers has not been changed, the regulator said.

The recommendations are subject to approval from the Department of Telecom before being formed into law. UNI