Sage Journals: Discover world-class research

Abstract

The recent Telecom Regulatory Authority of India (TRAI) norms on mergers and acquisitions (M&A) create a two-pronged upper bound for the merged entity based on spectrum share and market share. The spectrum share, defined in terms of share of second generation (2G) spectrum held, is set at a low level (25 per cent) and the market share at a high level (60 per cent). This severely restricts the M&A transactions possible, and also ignores the fact that since each subscriber is increasingly being serviced using a combination of 2G and third generation (3G) technologies, the definition of spectrum share cannot merely be restricted to 2G spectrum. Further, given the convergence of the computing and telecommunications industries and the creation of value networks of devices, service providers and applications to provide a seamless computing, telecommunications and entertainment interface to the consumer, one has to look at regulating the market power of networks rather than of industry silos. This article details the implications of the TRAI approach and shows the need for a new framework of regulation.

Keywords

M&A telecommunications spectrum value network ICT consolidation

Get full access to this article

View all access options for this article.

References

Brandenburger

Nalebuff

(1997), Co-opetition. New York: Doubleday.

Farrell

Weiser

(2003), ‘Modularity, Vertical Integration, and Open Access Policies: Towards a Convergence of Antitrust and Regulation in the Internet Age’, Harvard Journal of Law and Technology, 17(1): 85–135.

Federal Communications Commission (FCC) (2011), ‘AT&T and T-Mobile’, WT Docket No. 11-65, available at http://transition.fcc.gov/transaction/att-tmobile.html (accessed 15 May 2012).

Joskow

Paul L.

Noll

Roger G.

(1999), ‘The Bell Doctrine: Applications in Telecommunications, Electricity, and Other Network Industries’, Stanford Law Review, 51(5): 1249–315.

Mulligan

Catherine E.A.

(2011), The Communications Industries in the Era of Convergence (Routledge Studies in Global Competition). UK: Routledge.

Philip

Joji T.

(2012), ‘Telecom Department Seeks Exemption from Competition Act’, The Economic Times, available at http://economictimes.indiatimes.com/news/news-by-industry/telecom/telecom-department-seeks-exemption-from-competition-act/articleshow/12323238.cms (accessed 15 May 2012).

Porter

M.E.

(1992), ‘Toward a Dynamic Theory of Strategy’, Strategic Management Journal, 12: 95–118.

Prasad

Sridhar

(2009), ‘Allocative Efficiency of the Mobile Industry in India and its implications for Spectrum Policy’, Telecommunications Policy, 33(9): 521–533, DOI: 10.1016/j.telpol.2009.06.001.

Shapiro

(2003), ‘Technology Cross-Licensing Practices: FTC versus Intel (1999)’, in Kwoka

John E.

White

Lawrence

(eds), The Anti-trust Revolution, pp. 350–72. New York: Oxford University Press.

10.

Singh

(2008), ‘The Diffusion of Mobile Phones in India’, Telecommunications Policy, 32(9–10): 642–51, DOI: 10:1016/j.telpol.2008.07.005.

11.

Supreme Court of India (2012), Available at http://articles.economictimes.indiatimes.com/2012-02-03/news/31021473_1_crore-in-corporate-guarantees-telecom-licences-dent-investor-confidence (accessed 15 May 2012).

12.

Telecom Regulatory Authority of India (TRAI) (2010), ‘Recommendation on Spectrum Management and Licensing Framework’, available at http://www.trai.gov.in/WriteReadData/Recommendation/Documents/FINALRECOMENDATIONS.pdf (accessed 15 May 2012).

13.

Telecom Regulatory Authority of India (TRAI). (2011a), ‘Recommendations on Spectrum Management and Licensing Framework—Response of the Authority on DoT Reference No. 20-281/2010-AS-I(VoL)(Pt.)’, available at http://www.trai.gov.in/Content/RecommendationDescription.aspx?RECOMEND_ID=231&qid=0 (accessed 15 May 2012).

14.

Telecom Regulatory Authority of India (TRAI). (2011b), ‘TRAI Subscriber Numbers as of Sep 2011’, available at http://www.trai.gov.in/WriteReadData/PressRelease/Documents/Press_Release5-11-2011.pdf (accessed 15 May 2012).

15.

Telecom Regulatory Authority of India (TRAI). (2011c), ‘TRAI Financials for the Quarter Ending Sep 11’, available at http://www.trai.gov.in/WriteReadData/PIRReport/Documents/Q2(11-12).pdf (accessed 15 May 2012).

16.

Telecom Regulatory Authority of India (TRAI). (2012), ‘Recommendations in Response to DoT’s Reference Back on TRAI’s Recommendations on “Auction of Spectrum”’, available at http://www.trai.gov.in/Content/RecommendationDescription.aspx?RECOMEND_ID=465&qid=0 (accessed 15 May 2012).

17.

Vascellaro

Jessica E.

(2012), ‘Audit Faults Apple Supplier’, Wall Street Journal, 30 March, available at http://online.wsj.com/article/SB10001424052702303404704577311943943416560.html (accessed 15 May 2012).

Regulating Competition in ICT Value Networks

Abstract

Keywords

Get full access to this article

References