New telecom operators can’t sell stakes for three years: Government

November 25th, 2008 - 7:13 pm ICT by IANS  

New Delhi, Nov 25 (IANS) Mergers and acquisitions between new telecom operators will be allowed only if they have completed three years of operations after being issued licenses, Telecom Minister A. Raja said here Tuesday.Additionally, the market share of the merged entity in the relevant telecom region should not be more than 40 percent either in terms of subscribers separately for wireless and wired line phones, or in terms of adjusted gross revenue (AGR), he said.

“We have referred the three-year lock-in period to TRAI (Telecom Regulatory Authority of India) and the ministry of company affairs,” Raja said during the annual Economic Editors’ Conference.

Telecom Secretary Siddharth Behura said the ministry was considering easing norms for rollout of services.

Under the existing rules, telecom operators are required to roll out 10 percent of services within a year and are liable to pay a penalty if this obligation is not met.

However, if the new norms are introduced, opertors will have three years to roll out 50 percent of services.

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