Wednesday, August 29, 2007

TRAI: No M&As in circles with less than 4 operators; M&A norms intended to avoid merger of top 2 players in a circle

TRAI has raised the spectrum charges by 1% for beyond 8 mhz. Beyond 15 mhz it will be 8% of AGR. Anyone going for beyond 10 mhz, will have to pay one time price of Rs 16 crore. Announcing the TRAI M&A norms, Nripendra Mishra of TRAI says that the recommendations are conducive to future technology. He said that the number of players in each circle should be left to the market forces. Mishra mentioned that the recommendation ensures level playing field is maintained.

TRAI is also to make recommendations on spectrum allocations. The recommendations provide technology neutrality. They will invite auction pricing for spectrums except 800, 900, 1800 MHz.

The criterion of market share in M&A has been lowered to 40% from 67% and the minimum service providers per circle has been raised to 4 from 3. There will be no M&As for circles less than 4 operators. TRAI says that the M&A norms are intended to avoid merger of top 2 players in a circle. The automatic approval for cross holding has been raised to 20% from 10%. The USO charges will come down to 3% in case of 80% rural completion. 15 MHz ceiling has been removed in case of M&As.

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