Gokul Blog — A conversation on VoIP, IMS, Cisco and Just about Anything

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Are we going to see a Telecom M & A spree in India?

Posted by tggokul on August 10, 2007

I am hearing from various sources that TRAI ( Telecom Regulator of India) is seriously thinking of relaxing some rules to make Telecom M & A easier.  There is a peculiar law ( which I never failed to understand) that prevents a telecom company from holding more than 10% stake in two operators in the same circle.

TRAI is looking to remove this ceiling which I think would be a major step in enabling consolidation in India. At the same time TRAI is keen that we don’t see monopolies taking over. There is yet another law that states  if two players are looking at M & A, then their combined market share should not exceed 67%. TRAI is not only looking at relaxing the 10% ceiling but also looking at reducing this 67% to 50%. These would counter balance each other.Also I believe there are plans to ensure that the number of operators at any given circle is minimum three.

It is very refreshing to see TRAI being proactive. They understand that Telecom needs more consolidation in these parts of the world and are acting accordingly. It is just going to be a matter of time before my predictions of large M & As starts to become true.

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