DoT, telcos to discuss M&A norms

The Department of Telecommunications (DoT) is set to discuss with telecom operators options of mergers and acquisitions (M&As) between telecom companies, including a proposal to let a 2G operator buying another operator (owing 2G and 3G spectrum) keep only a chunk of the 2G spectrum free, while paying the market price for the rest. The operator has to surrender the spectrum beyond the cap of about 15 MHz imposed on a circle.

However, broadband wireless access (BWA) operators offering 4G services can buy or merge with a 2G or a 3G operator without having to pay any extra charge.

Among the issues to be discussed at the meeting is a proposal that a 3G operator seeking to buy an operator with 2G and 3G spectrum would surrender a block of 3G spectrum. For a telecom company that has 2G, 3G and BWA spectrum and wants to buy or merge with a company that has 2G and 3G spectrum, the government proposes it would get only a block of 2G spectrum free, while paying the market price for the rest.

Also, it has to surrender a block of 3G spectrum.

The agenda of the meeting, scheduled for Monday, is to discuss with stakeholders the parameters of the new M&A policy, which would determine consolidation in the industry. Lack of clear guidelines on M&As has prevented many possible deals.