The new clauses in the mergers and acquisitions policy for the telecommunication sector of India may be met with disappointment or even outright indignance. The government, through the new rules, would most likey require that companies pay market price for spectrum obtained through acquisitions.
This conlusion was reached after a review of a policy document dated October 8 previously reviewed by the Economic Times.
The said guidelines meant that the government did not relent as to the proposals made in the draft form of the policy despite pressure from the telecommunications industry. The document further declared that any acquisition would only be permitted so long as the merged entiity's share of revenu and subscribers would be capped at 35%. This would most likely affect Bharti Airtel's plans to consolidate the market as it is very near the threshold.
Many telecommunications firms have been awaiting the M&A regulations to be issued as the industry, many experts believe, is primed for consolidation. The consolidation would effectively reduce the number of operators and would result in better market economics for all.
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