The Empowered Group of Ministers, headed by Finance Minister P Chidambaram, on Tuesday approved the much-awaited guidelines on telecom M&As and decided on the quantum of 2G spectrum to be auctioned in January 2014.
In a merger, the resultant entity has to pay market rates for holding spectrum above 4.4 MHz that was allotted to the companies administratively at old rates. If two entities which are merging hold airwaves purchased through auctions, they will not have to pay market rate for spectrum, sources said, adding that it has also been decided to put a cap on spectrum a final entity can hold in an area.
However, the merging companies will have to comply with the lock-in clause for sale of equity. The telecom sector's first M&A rules paves ways for consolidation in the Indian telecom market where there are about 12 players including Bharti Airtel, Vodafone, BSNl, Tata Teleservices, Videocon and Aircel.
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