What should be the limit on market share after M & A in Telecom space ?

TRAI's consultation paper on licensing norms review has attracted following views from major Indian Telcos :


State-owned BSNL has suggested lowering of the market share limit to 40 per cent from the current 67 per cent following the merger and acquisitions of two entities in the telecom sector to avoid monopolistic situation. "It is felt that the existing provision of 67 per cent market share will create non-competitive or monopolistic situation. It is, therefore, suggested that this limit should be brought down to about 40 per cent"


Vodafone Essar, which has recently acquired number two slot in terms of subscriber base, said "We are of the opinion that the 67 per cent limit is appropriate when applied to a narrow mobile market definition. "But regime of the current M&A Guidelines, not a single intra-circle merger between licensees has taken place to date and it cannot be said that the current guidelines have produced an environment of undue consolidation. The guidelines, therefore, remain appropriate."


CDMA player Tata Teleservices wants this cap to be at 45 per cent. "We recommend a maximum market share of 45 per cent for the merged entity," the company said. The PSU also wants fixing a maximum spectrum limit that would be held by a merged entity be. It also does not want any merger to be allowed between a CDMA and a GSM company. Vodafone Essar said the merged entity should have a spectrum limit.

Hutch Essar may soon be no. 2 GSM operator - ready to over take BSNL

In April, the cellular subscriber base of Bharti touched 3.88 crore with additions of 17.51 lakh users, followed by BSNL at 2.77 crore with a market share of 22.10 per cent and additions of 3.26 lakh subscribers.
Hutch-Essar has 2.77 crore subscribers, taking its market share to 22.06 per cent and Idea with a market share of 11.60 per cent has 1.45 crore subscribers in April.
Hutch-Essar added 12.61 lakh subscribers in the month of April(against 3.26 of BSNL), while Idea added 5.52 lakh mobile users in the same month. If trend continues , by May end Hutch will over take BSNL as no 2 GSM operator.

Sustaining its aggressive growth in subscriber additions, the GSM-based cellular industry has added over 41 lakh subscribers in April with Bharti Airtel capturing 30.97 per cent of the market share.
With this, the all-India GSM subscriber base has touched 12.55 crore at the end of April 2007 compared to 12.14 crore at the end of March 2007, reflecting a growth rate of 3.40 per cent, the Cellular Operators Association of India (COAI) said in a statement.
CDMA mobile figures are yet to be out.
MTNL's GSM subscriber base in Delhi and Mumbai touched 24.83 lakh, while Spice Telecom has over 28 lakh subscribers.
Aircel's user base in April stood at 59.27 lakh, followed by Reliance Telecom's 43.47 lakh subscribers.