Trai moots reforms in merger norms

NEW DELHI: In a bid to reform norms for transfer and merger of telecom licences, Trai on Friday suggested that while both subscriber base and revenue are considered in determining marketshare for mobile and internet service providers, only revenue should be taken into account in marketshare calculation for other services like national and international long distance telephony.

The sector regulator also suggested that the one-year timeline currently allowed for transfer/merger of licences in different service areas after NCLT nod should exclude time spent by companies in pursuing any litigation on account of which the final approval of a merger is delayed.

Trai recommended that the guidelines on transfer/merger of licences should not 'hard-code' (that is, explicitly specify) the spectrum caps. Instead, it should be linked with the relevant clause of the licence, it said.

The Trai has now released its recommendations on reforming the guidelines for transfer and merger of telecom licences, after the telecom department in May 2019 sought its views on enabling simplification and fast-tracking of approvals.

Trai's suggestions range from marketshare math to approval timelines, and other terms. Trai noted that the guidelines should be seen in the backdrop of consolidation in the market from 12-14 service providers a decade ago to four operators now, the National Digital Communication Policy's thrust on speedy approvals and the delays in mergers being taken on record.

"The authority recommends that for computing market share of an NSO (Network Service Operators) in the relevant market, market share of the VNO (virtual network operator) parented with it should be added to the market share of NSO, if the NSO is a promoter of VNO," Trai said.