Telecom M&A guidelines may be announced this week: Sibal

Guidelines will allow telcos to acquire operators in a manner that market share of the resultant entity does not exceed 50%

The government may finally announce much awaited, first-ever policy on mergers and acquisitions for the telecom sector this week.

 

"It (Mergers and acquisition guidelines) has been cleared by Telecom Commission. We will announce it any day now. Probably in coming week," Telecom Minister Kapil Sibal told PTI.

 

Inter-ministerial panel Telecom Commission on November 6 approved the guidelines which will allow telecom companies to acquire operators in a manner that market share of the resultant entity does not exceed 50%.

 

The M&A policy is expected to further infuse investment in the sector.

 

India's telecom sector, which has 13 mobile service providers, is expected to see consolidation as some of them under huge debts and unable to generate profits may look to exit the market.

 

Vodafone India, which has around 17.8% market share, has already said it has strong financial condition to acquire another company.

 

"I think 4 to 5, may be if you include state operators then 6, is the maximum (number of operators) that this market can have. It means where we see nine today, major 3 to 4 (service providers) need to consolidate in one way or the other," Vodafone India's Managing Director and Chief Executive Officer Martin Pieters has earlier said.

 

Last month, Bharti group Chairman Sunil Mittal also said that Airtel will look at opportunities to acquire another firm in India, provided that there is a clear M&A policy in place.