In a move that is expected to spark off massive consolidation in the telecom industry, the government will issue guidelines for intra-circle (within a circle) mergers and acquisitions this week.
"The matter of intra-circle mergers and acquisitions will be put up to me tomorrow or day after and I will be able to report on it in two days," Communications and IT Minister Arun Shourie said at the Gartner Telecom Summit in New Delhi on Tuesday.
He, however, declined to say whether the ministry would accept the recommendations made by the Telecom Regulatory Authority of India on the subject in toto.
The industry was waiting for the guidelines in order to start merger and acquisition related activities, he said.
On the issue of hiking the foreign investment limit in telecom services to 74 per cent from 49 per cent at present, Shourie said: "It is a matter to be addressed after elections depending on government portfolios."
"Only the prime minister and the deputy prime minister can decide," he said.
It may be recalled that telecom regulator TRAI had last month recommended mergers and acquisitions within a circle, subject to certain conditions like the number of operators in any circle should not reduce below three.
In its guidelines for intra-circle mergers and acquisitions, TRAI had said examination of the impact of merger would be conduced by competent authority (licensor) in cases where the marketshare of merged entity is greater than 50 per cent and where concentration of top two firms in a post-merged scenario is over 75 per cent.
"If consequent to the merger under consideration, the number of operators in any circle or served market reduces below three, the merger will not be allowed by the competent authority," it had said while giving recommendations to the government.