New Delhi, March 30: The government will not give Idea Cellular and Vodafone India any leeway on spectrum, subscriber and revenue caps, telecom minister Manoj Sinha said. "They have to comply with the rules... there will be no special treatment," Sinha told reporters. On the Vodafone and Idea Cellular merger - which is set to create India's largest telecom operator displacing Bharti Airtel from its current pole position - the minister said if the merging entities do not adhere to the rules, they would not be allowed to proceed. Telecom analysts have been flagging certain hurdles in the deal, including breach of revenue market share, subscriber and spectrum caps in five markets. "There are already parameters in place... that in the next one year, if your revenue or subscriber numbers are more (than the permitted ceiling) they will have to reduce...they will have to comply," Sinha said. The sector itself is undergoing massive consolidation with Reliance Communications, MTS merging into Aircel, Bharti Airtel buying Telenor and recently broadband player Tikona. But despite consolidation, the sector has no threat from cartelisation, the minister said. "After consolidation, there will still be 5-6 players in each service area. So, cartelisation is not possible. Also, there are guidelines on revenue cap, subscriber cap and spectrum cap which will ensure a healthy competition. We have taken all precautions". Necessary guidelines in the form of revenue, subscriber and spectrum caps are already in place to ensure a healthy competition, he said. "We already have guidelines in terms of 50 per cent revenue, and 50 per cent customers cap ... spectrum cap is also there ... so, to ensure a healthy competition in the sector, necessary precautions are already in place ... there is no danger of cartelisation," the minister said.
The Indian government has set hard rules for the proposed Vodafone India and Idea Cellular merger, stating that no leeway will be permitted on caps for spectrums, subscribers and revenue. The merger will create the largest telecoms operator in India if it goes ahead.