Under the proposed telecom M&A rules, an entity having more than 10 per cent share in an operator, which has been formed as a result of acquisition or merger, cannot sell equity for a period of three years.
"If a licencee participates in spectrum auction and is consequently subject to lock-in condition, then if such a lincensee propose to merge/ amalgamate in to another licencee ... The lock-in period would apply in respect of new shares which would be issued in respect of the resultant company," a source said.
As per the guidelines approved by Empowered Group of Ministers on telecom, headed by Finance Minister P Chidambaram, telecom companies which hold liberalise spectrum opt for consolidation won't have to make additional payments to the government for radiowaves after a merger.
All spectrum purchased in auction or old spectrum for which companies have paid the rate determined through auction has been termed as 'liberalised' spectrum.
Only companies that would acquire operators that hold spectrum allocated based at old rate of Rs 1,658 crore will have to pay the difference between market rate and old rate.
In addition to this, if a telecom operator holding spectrum won in auction is acquired after one year from the date of spectrum allocation, the buying company may have to pay additional price calculated on the basis of SBI prime lending rate.
Telecom companies which have not paid market determined price for old spectrum may be asked to submit one-time spectrum fee calculated by government as bank guarantee before participating in consolidation activities, sources said.
