The government announced long-awaited M&A rules for the telecom industry that raised the cap on the market share of a merged entity in a circle to 50% from 35% earlier, but retained a contentious clause that requires a buyer to pay market-linked price for spectrum that comes with any acquisition. The rules, which would now potentially allow top operators such as Bharti Airtel and Vodafone to acquire smaller rivals, or smaller operators to sign deals with each other, was viewed positively by an industry desperate for consolidation. However, the rule under which a merged entity would need to pay the market price for the entire spectrum holding minus the entry fee already paid by the seller would increase M&A costs and potentially scuttle a lot of deals

(Economic Times)