5, నవంబర్ 2011, శనివారం

TRAI Proposes easier guidelines for Mergers and Acquisitions


As per the latest proposals of the TRAI, mergers and acquisitions among  telecom operators are to be allowed more easily. It proposed that the new entity formed due to merger/acquisition can hold upto 25% of the spectrum available(earlier it proposed 15 MHz only), can hold 35% of the market share(earlier it proposed 25%) in a circle and it could go even upto 60% , the number of operators can be even less than 6(at present there are 12 to 14 operators in each circle and earlier the TRAI proposed that the number of operators in each circle should not be less than 6), and  the condition that the original promoter should retain atleast 51% for 5 years will not be applicable for mergers and will be made applicable only in case of acquisitions.
These proposals are aimed at creating oligopoly i.e telecom market dominated by a few operators where in the operators numbers in each circle will get reduced to less than six instead of the present 12-14 by the process of mergers and acquisitions. The proposal is for allowing market share to a single company even to the extent of 60%. This will result in monopoly/oligopoly instead of competition and customers will face increase in tariff and decrease in quality of services.
These proposed guidelines will be considered by the Telecom Commission before taking a decision.
 It is necessary to drop these guidelines in order to protect the interest of the customers.

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