Trai moots easier norms for telecom business, speedier M&A nods

Published On: 30, Nov 2017 | Source:


Regulator Trai today advocated time-bound approval for merger or transfer of licences after NCLT nod and favoured allowing trading or surrender of excess spectrum of a merged entity within a year. These and other suggestions formed part of the regulator’s latest recommendations on ‘ease of doing telecom business’. The Telecom Regulatory Authority of India (Trai) said that promoting and facilitating easier norms was essential for unhindered growth of the sector. “DoT (Department of Telecom) should spell out a definite timeline, not exceeding 30 days post NCLT (National Company Law Tribunal) approval, for providing written approval to transfer or merger of licences by the licensor and it should be made a part of the merger and acquisition guidelines,” Trai said. The series of measures mooted include a 30-day deadline for granting import licences to companies and permitting trading or surrender of excess spectrum of a merged entity within a year. Industry body COAI said the proposed rules could significantly ease mergers and acquisitions (M&As) and improve normal operations of the telecom service providers.

The recommendations come as “a breath of fresh air” to the industry which is financially distressed and “needs all the help it can get from the government”, Cellular Operators’ Association of India (COAI) said in a statement. Trai, in its recommendations, said that spectrum trading should be permitted in all the access spectrum bands which have been put to auction. “The permissible block size for trading in a band should be same as specified in the Notice Inviting Applications (also called the auction document), for the latest auction held,” it said.

Trai also felt that where M&A resulted in excess spectrum holding beyond permissible cap, the merged entity “should be given an option to either surrender or trade its spectrum holding, within the stipulated period of one year”. The sector watchdog has also said the telecom department should devise a matrix that would link the financial penalties to the severity of the incident and recurrence of violation, thus meeting a key demand by the mobile industry. “This was a key demand as currently the telcos were being forced to challenge penalties going into crores of rupees, for extremely minor violations, taking us to the courts, leading to long and financially draining cumbersome and unnecessary litigations,” Rajan S Mathews, Director General, COAI, said.