The country's telecom department is reportedly mulling over barring spectrum sharing and trading, and mergers and acquisitions (M&A) in the sector till the auctions end in a bid to define the spectrum caps while setting out the rules for the sale. According to various media reports, the ban is likely to come in effect when the Notice Inviting Application (NIA) is published.
The NIA is expected in August, while the spectrum auction is likely to take place in September timeline. The NIA is the legally binding document containing all rules pertaining to the forthcoming spectrum auctions. The NIA also lays out spectrum holding limits for each of India's 22 circles as on the date of the release of the document.
Currently, Bharti Airtel is in the process to complete its spectrum trading deal with Aircel for two circles with its small rival Aircel. It has notably closed its trading deals with Videocon and for six circles with Aircel. Reports suggest the DoT's latest move would affect the Airtel-Aircel spectrum deal.
Anil Ambani-led Reliance Communications is also in the final stages of discussion with the promoters of Aircel to merge wireless operations to create a new wireless entity. In addition, India’s leading carrier Vodafone India is in talks with Norway-based Telenor on merger and acquisition for the latter’s India unit.
These two deals won't get requisite clearances till the auctions are over, an ET report said, adding that any decision on suspension of any consolidation moves, once made by the DoT, will need to be cleared by the Telecom Commission (TC).
According to an ET report, any spectrum sharing, trading or M&A deal in the interim — from the NIA issue date to the end of auction — could render caps set out in the document redundant, a scenario which the DoT wants to avoid.