The Telecom Regulatory Authority of India’s recommendation of a 60% market share cap on merger and acquisitions has been turned down by a standing committee of the Department of Telecommunications.
The regulator had come out with a set of recommendations this month on the the issue of M&A activity in India, which has been responded to by the DoT panel, according to TelecomOrbit.com, which tracks the telecom industry in India. The Telecom Commission will deliberate on the DoT committee’s recommendations Dec. 1.
“TRAI had wanted the resultant market share of the merged/acquired entity to be capped at 60%. The suggestion however, it appears, has come across as too liberal for the DoT committee, which compared the 60% limit to a ‘monopoly market situation’, and has accordingly refused to accept the recommendation,” TelecomOrbit reported.
“The committee has recommended that the permissible limit of the merged entity be fixed at 35% of the market share as it is already more than the threshold of TRAI’s ‘significant market power’ specified limit,” according to the website.
 TRAI’s recommendations were aimed at facilitating consolidation in the competitive Indian telecom market and preventing the fragmentation of already scarce spectrum.
The DoT committee also suggested caps on the amount of spectrum a merged entity can hold. It has prescribed a limit of 10 MHz for Delhi and Mumbai and 8 MHz for other service areas, the report stated.
