The government on Saturday issued final guidelines for mergers and acquisitions within a telecom circle with the condition that the market share of merged entity would not exceed 67 per cent.
"In order to ensure that sufficient competition exists, merger of licences will be permitted subject to the condition that, post merger, there are at least three operators in that service area for that service," the guidelines issued by DoT said.
The merger of licence is restricted to the same service area and this would be effective only in the fixed and mobile telephones.
"With a prior approval of DoT, merger of licence is permitted in categories -- cellular licence with cellular licence, basic with basic, unified with unified, basic with unified and cellular with unified," it said.
This means in case of a merger of basic service licence with unified licence, the basic licencee would have to pay the difference in entry fee at the time of application of merger.
Consequent to the merger, the merged entity would be entitled to total amount of spectrum held by the merging companies subject to the condition that the amount of spectrum should not exceed 15 Mhz per operator for metros and category 'A' service areas, 12.4 Mhz in category 'B' and 'C' service areas.
The unified access service licensee would be counted for basic and cellular services separately while deciding the number of operators in a given service area as the unified licence is valid for both types of services but with a payment of entry fee for offering cellular mobile services.
As per the guidelines, the spectrum utilisation charges beyond 10 plus 10 MHz for GSM based system and 5 plus 5 MHz for CDMA based services would be prescribed separately.
The merged entity would have to pay the prescribed charges from the date of merger of licences.
The guidelines can be reviewed after a period of one year, or earlier if required, DoT said in the statement.
Issuing the guidelines, DoT said the move was expected to further contribute towards efficient utilisation of resources and serving the consumer interests in particular and public interest in general.