Govt allows telecom license de-merger

NEW DELHI: In yet another sweeping move towards deregulation of the Indian telecom industry, the Government of India today amended cellular and basic service licenses clause to allow merger, de-merger and acquisitions. A notification to this effect has already been issued by the Department of Telecommunication (DoT) and sent to all telecom players.






According to the DoT notification, telecom companies can now de-merge their license in different circles or states to form separate entities and sell them. The initiative is aimed at enabling various service providers to sell their stake, partially or totally, in different circles.





However, the DoT notification prohibits the cellular and basic service providers from making any intra-circle acquisitions. This according to sources is aimed at preventing telecom players from creating a monopoly-like situation.





"Beside acquisition within the same service area would also lead to spectrum constraints," DoT sources said explaining that the necessary precautions have been taken by amending a clause relating to the "transfer of license".





DoT has also amended another clause that held back telecom companies from selling their stake before the expiry of five years of license. According to the notification, the Government has now withdrawn the particular clause, thereby allowing telcos to sell their stake anytime.