The highest decision-making body in the communications ministry, the Telecom Commission (TC), on Tuesday approved the Telecom Regulatory Authority of India’s (Trai) suggestions to relax spectrum holding limits by removing the 50% cap on intra-band spectrum holdings of telecom operators post mergers and acquisitions.
The move is now set to give a push to mergers and acquisitions activity in the country. Various analysts said that the move would directly benefit Vodafone India and Idea Cellular, which are in the process of merging their operations.
After the completion of their merger, the combined Vodafone-Idea entity would be able to retain all the airwaves owned individually by the two companies.
The telecom regulator had earlier suggested removing the 50% cap on intra-band spectrum holdings of telcos post mergers, but it had also recommended putting a 50% limit on the combined spectrum holding in the 700 MHz, 800 MHz and 900 MHz bands.
The regulator had also suggested increasing the overall holding limit to 35% from 25% assigned in a telecom circle to a telco. Present rules limit any merged entity from holding more than 25% of the spectrum allocated to a service area or circle, and over 50% of a band.
The Telecom Commission, the highest decision-making body of the department, said late last year that spectrum limits should be looked at by the regulator after it received recommendations from the inter-ministerial group that was looking into the financial health of the debt-laden sector.
In a note to the regulator, the Sunil Mittal-led telco earlier opposed any removal or relaxation of the upper limit on spectrum holding in a band from the present 50%, while the Mukesh Ambani-led Jio said the 50% in-band cap should be done away with, as technology has become spectrum-agnostic.