An Empowered Group of Ministers (EGoM) on Tuesday approved the much-awaited Mergers and Acquisitions (M&A) guidelines for the telecom sector.
The high-powered ministerial panel, which is headed by finance minister P Chidambaram, also cleared the sale of 403 MHz of spectrum in the 1800 MHz band, a source said.
"EGoM has approved M&A guidelines, which will now go for the approval of the Cabinet," the source said, adding that legal opinion will be taken if M&A amounts to sale of equity.
The panel also approved payment of market rates for spectrum above 4.4 MHz allotted to the acquired entity.
The M&A guidelines are expected to pave the way for consolidation in the telecom sector where there are 12 mobile service providers, including Bharti Airtel, Vodafone, BSNL, Tata Teleservices and Aircel.
The Telecom Commission has already approved the draft M&A guidelines, which say the market share of a merged entity should not exceed 50% of the subscriber base.
The EGoM also approved the sale of 403 MHz of 2G spectrum (1800 MHz), which is valued at about Rs 36,000 crore, as per the Telecom Commission's recommended reserve price, the source said.