Trai paper on 3-yr lock-in for promoters' equity in telcos

Telecom regulator Telecom Regulatory Authority of India (Trai) will soon issue a consultation paper shortly on a proposal by the Department of Telecom (DoT) for a lock-in period for promoters' equity in telecom companies to get the views of the industry and the experts

The government has referred the two issues -- the three-year lock-in period and the spectrum charges with regard to 3G and 2G services -- to the telecom regulator, Trai Chairman Nripendra Misra told PTI.

The move gains importance after two new telecom players - Swan and Unitech - sold stakes to foreign companies at high premiums after they were allotted spectrum.

The Left parties had accused Telecom Minister A Raja of underselling spectrum and had said it cost the national exchequer around Rs 60,000 crore.

The DoT has proposed a three-year lock-in period for equity in companies to avoid major shareholders selling stake at a premium even before starting the services. It has been alleged that some new telecom companies have sold their promoters' stake at high premium after obtaining the precious spectrum at a nominal price.

Trai has to issue a consultation paper on the lock-in period first and after that whether to go for a limited open house or full open house, would be decided later, he said.

"We had earlier given our recommendations on lock-in period in case of mergers and acquisitions but the promoters issue is slightly broader in the context of USAL licence," the Chairman added.

"The promoters who have over 10 per cent stake in a company, the question is should it be disallowed for three years from the effective date of licence to sell their equity. The issue of additional equity and if this could be applicable where the issue of transfer of shares", said DoT's letter to Trai.