NEW DELHI (Reuters) - The telecoms regulator on Tuesday recommended ending restrictions on companies selling out, a move that will help paving the way for consolidation in the world's fastest growing mobile services market.
Current rules do not allow companies to sell majority stakes in the first three years of getting a licence to offer telecoms services.
"We are clearly saying we should consolidate. We are not mandating consolidation but facilitating it. Our recommendations are clearly in that direction," J.S. Sarma, chairman of Telecom Regulatory Authority of India (TRAI), told a news conference.
However, it said there should be restrictions on mergers that would result in a firm getting more than 30 percent of the total subscribers or revenue in any of India's 22 telecoms zones.
The recommendations have to be accepted by the telecoms ministry before they become law.
There are 15 operators and 584 million mobile users in India, the world's largest market for such services after China.
New subscriber additions of nearly 16 million a month have attracted global firms such as like Norway's Telenor, Japan's NTT DoCoMo and Abu Dhabi's Etisalat, but profit margins have taken a hit due to a tariff war.
Still, bids for one set of nationwide third-generation (3G) mobile spectrum licences have reached $3 billion in an ongoing auction.
The regulator also suggested telecoms firms pay a one-time fee for holding radio-spectrum beyond 6.2 mega hertz (MHz) based on 3G prices, a move that will hit established operators like Bharti Airtel and Vodafone.
The regulator expects to raise 300 billion ($6.6 billion) to 350 billion rupees from one-time spectrum charges from these operators.
India currently grants additional radio airwaves to firms when they reach subscriber-addition milestones, only charging a usage fee.
The regulator said telecoms firms should not be given free spectrum when their licences came up for renewal, but they must pay market rates based on 3G prices.
($1 = 45.2 rupees)
Reporting by C.J. Kuncheria; Writing by Sanjeev Choudhary; Editing by Ranjit Gangadharan
Reuters India
