TRAI proposes ways to ease doing business in the telecom sector
To improve the ease of doing business, the Telecom Regulatory Authority of India (TRAI) has proposed some new measures.
These include approval for a merged entity within 30 days of a go-ahead from the National Company Law Tribunal (NCLT), giving telcos up to a year to surrender or trade excess airwaves in the case of a merger, permitting trading in all bands which have been put on auction, plus less harsh penalties.
If the Department of Telecommunications (DoT) agrees, the proposed mergers of Bharti Airtel and Telenor, Vodafone and Idea Cellular, and Bharti Airtel and Tata Teleservices’ mobile businesses would all get approval in a short span. In the past, DoT had taken several months to approve mergers between companies, even after a green signal from NCLT.
For instance, after NCLT approval, the Airtel-Qualcomm merger approval from DoT took six to seven months, and that of Reliance Communications and Sistema Shyam Teleservices took around four months. Industry representatives say this delay increases the uncertainty and operational costs.
TRAI has recommended that DoT issue a definite timeline, not exceeding 30 days after NCLT approval, for written approval to transfer or merge licences; it should be part of the merger and acquisitions guidelines.
And, if a merger results in spectrum holdings beyond the permissible cap, the entity should get the option to surrender or trade the excess within a year. TRAI has also proposed that spectrum trading be permitted in all bands put to auction, the permissible block size being the same as specified in the notice inviting applications for the latest auction.
“DoT should devise a suitable matrix, linking financial penalties to the severity of a violation and its recurrence,” TRAI sources said.