New M&A Rules Proposed By TRAI To Benefit Telenor

TRAI has proposed new rules or rather amendment of old rules regarding Mergers & Acquisitions (M&A) which are believed to be beneficial for Norwegian mobile operator Telenor ASA.

The proposed rules allows the companies to merge  if their combined subscriber or revenue market share does not exceed 60%, provided, the companies get a consent from TRAI if the created company has a market share between 35% and 60%. No consent is required if the market share is below 35%.

These relaxations will surely help troubled Telenor, who is looking for a third partner (rumored to be Aircel); after Unitech who holds 32.75% stake, in comparatively small mobile company Uninor.

Telenor’s CEO and President Jon Fredrik Baksaas called the rules “fair” and “reasonable” & added “Every market has its framework for competition setup. The way things are spelt out now seems to be fairly reasonable.”

Uninor, which currently operates in 13 Circles is under investigation in the 2G Scam & its “Rights issue” (IPO) too has failed to take-off owing to Unitech insistence (via court), that Uninor be funded through the Debt route (Bank Funding’s), while Telenor wants to rest its fate in the hands of Indian investors (Equity).

While companies are growing through alternative channels, Uninor is embroiled in legal wrangles & small subscriber base. Do you think these rules will positively impact Uninor or it should focus harder on retaining the fleeing customers?

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