Telecom Minister Kapil Sibal unveiled new norms for the telecom sector. India will allow mergers and acquisitions in the telecoms sector that create combined market share of up to 35%, under a quick and simple process.
In an interview to CNBC-TV18, JS Sarma, chairman of the Telecom Regulatory Authority of India (TRAI) is glad that there is a greater clarity and decisions have been taken. According to him, the road ahead is clear. "I think that should augur well for the telecom sector," he adds.
Below is the edited transcript of his interview on CNBC-TV18. Also watch the accompanying videos.
Q: What is your first response to the announcement by the Department of Telecom? What do you make of the final decision on the recommendations that you had made?
A: I am happy that the Department of Telecommunications has taken these decision. These recommendations were originally made in May 2010. Thereafter, we clarified various issues in February and November 2011. So, I am glad that there is a greater clarity and decisions have been taken. So, the road ahead is clear. I think that should augur well for the telecom sector.
Q: The initial reactions, atleast in some reports, post the original recommendations in May 2010, were dictated perhaps by the feeling that this was not going to be good for industry. Today, if you do a quick recap of all the decisions that have been taken, there isn't a wide variation on several of the key recommendations, whether it be spectrum, whether it be the licensing framework. Would you really tell industry at this stage that this is perhaps the best way to proceed ahead in the manner in which the government had decided?
A: These recommendations have been subjected to a very detailed examination at various levels in the department itself. Subsequently, I recall last year the round table discussions were held. I am sure several rounds of discussions were held formally and informally by the government. Thereafter, the Telecom Commissioner itself has considered these in great detail. So, the fact that these recommendations hold good has been proven by now overtime.
I am happy that these decisions virtually coincide with recommendations of the TRAI. So, to that extent, I am happy. More importantly, I am happy that whatever we have stated has been found to be acceptable by the government as such in this policy making.
Q: Spectrum cap at 8 MHz across India barring Delhi and Mumbai which is 10 MHz on GSM as well as the linkage that exists post merger and amalgamation in a particular circle, the 25% cap. The response that we are picking up initially at this stage is that industry feels disappointed that this cap is far lower than the global average of 18-20 MHz that's supposed to exists. Do you think this in some ways is not a very good move? Does it signal that there won't be long-term consolidation in this sector?
A: Item 11 of the press release says, the licensee can acquire additional spectrum beyond prescribed limits in the open market, should there be an auction of spectrum. The auction is now more or less the directed policy. We are working towards designing of auctions. So, I don't anticipate any particular problems.
Our recommendation of 8 MHz and 10 MHz was in the context of government assigning the spectrum to the operators. So, now anybody can acquire any amount of spectrum. So, 8 and 10 MHz is not the maximum limit that anybody can hold at any point of time.
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