EGoM on telecom to meet on Dec 3 to discuss M&A rules

The guidelines are expected to pave way for consolidation of mobile phone companies in the sector

The Empowered Group of Ministers on telecom, headed by Finance Minister P Chidambaram, is scheduled to meet on December 3 to discuss the much-awaited mergers and acquisitions (M&A) guidelines.

"The EGoM will meet on December 3 to discuss the M&A rules," a source in the DoT said.

The high powered ministerial panel was to discuss the issue in its meeting on November 22 but the matter was ultimately not taken up during discussions.

The M&A guidelines are expected to pave way for consolidation of mobile phone companies in the sector.

Inter-ministerial panel Telecom Commission, which is the highest decision making body of Department of Telecom (DoT) has already given its nod to allow telecom companies to merge in a manner that their market share does not exceed 50 per cent in terms of subscriber base.

The Cabinet too has announced broad guidelines with respect to M&A Policy. The EGoM is likely to take call on pricing and fees related to mergers and acquisition rules.

These include spectrum charges that an entity formed after merger would have to pay on its total holding, lock-in period of the merged entity and a transfer fee on spectrum allocated to a company and gets moved to another entity within period of three years as result of M&A.