The Department of Telecommunications, Ministry of Communications, Government of India, (“DoT”), in exercise of the powers conferred under Section 3(1) and Section 3(5) read with Section 56(2)(a) and Section 56(2)(c) of the Telecommunications Act, 2023, vide Notification No. G.S.R. 690(E),[1] dated September 19, 2025, has issued the Draft Telecommunications (Regulation of Restructuring or Acquisition of Authorised Entities) Rules, 2025 (“Draft Rules”). These Draft Rules propose a comprehensive framework to regulate mergers, demergers, acquisitions, and other restructuring activities of telecom entities holding authorisations or licences.
The said Draft Rules supersede the Guidelines for Transfer/ Merger of Licences, 2014 under Unified Licence (UL), however, the approvals already granted under those guidelines shall remain unaffected.
Key Highlights of the Draft Rules
I. Applicability of the Draft Rules
(a) The Draft Rules shall be applicable to all authorised entities (including licensees under the Telegraph Act, 1885 (“Telegraph Act”) or entities authorised under the Telecommunications Act, 2023 (“Act”)). However, certain provisions including Rules 5, 11, 12, and 14 shall only apply where the said entity, based on the latest audited financials, has a turnover exceeding INR 50 crore (Indian Rupees Fifty Crores Only).
(b) Further, the following shall be the exempted from the applicability of the Draft Rules (i) Government disinvestment transactions; (ii) Enforcement of lender rights over pledged assets under Section 45 of the Act; and (iii) Transactions involving broadcasting service providers (unless combined with telecom services).
II. Compliance Framework
(a) Compliance with these Draft Rules shall be deemed to be a condition of every authorisation or assignment. Both the entity and its promoters shall be responsible for ensuring adherence, and any breach shall be treated as a violation under the Telecommunications (Adjudication and Appeal) Rules, 2025.
(b) Authorised entities must also comply with any notifications, orders, directions or guidelines issued by the Central Government to operationalise these rules, provided they are not inconsistent with the framework.
III. Disclosure of Shareholding and Control:
(a) An authorised entity undergoing restructuring or acquisition must ensure full compliance with disclosure and investment obligations defined under the Draft Rules. It shall be required to submit, in the form and manner specified by the DoT, details of its shareholders as mandated under the authorisation rules.
(b) The said entity must also ensure that the total foreign investment in its paid-up capital does not exceed the ceiling prescribed by the Central Government, and that such investment remains in conformity with the applicable terms and conditions of both foreign investment policy and the authorisation itself.
(c) Further, all foreign direct investment must be made in accordance with applicable laws and policies, with requisite approvals duly obtained. The entity also must ensure that there is no direct or indirect investment by any prohibited investor as defined under the authorisation rules.
IV. Prior DoT Approval for Restructuring and Acquisition
(a) The authorised entities with a turnover above INR 50 crore (Indian Rupees Fifty Crores Only) must obtain prior written approval of the DoT before any restructuring or acquisition. The applications for the same shall be filed by the authorised entity (for restructuring) or either the entity or proposed acquirer (for acquisition), in the prescribed form with fees. If the DoT does not respond within 60 (sixty) days, the approval shall be deemed granted.
(b) Where an application is filed by a proposed acquirer, the DoT shall notify the authorised entity to seek consent or objection within 14 (Fourteen) days. If any objections are raised, the DoT shall hold a joint consultation and decide within 14 (fourteen) days to decide as to whether to proceed or reject the said application.
(c) The applications must include details of pending disputes, effect on market share and spectrum holdings (with auditor certification), compliance with Rules 6–10 of the Draft Rules, and disclosures of dues or bank guarantees where applicable. For restructurings, the scheme approved by the Board and shareholders must be filed with the DoT before approaching the tribunal, and no tribunal process may commence without DoT’s approval.
(d) The DoT may impose conditions, including lock-in restrictions on share transfers, which must be incorporated into the restructuring scheme before submission to the tribunal.
V. Restriction on Market Share Concentration: No acquisition or restructuring shall result in an authorised entity holding more than 50% (Fifty Percent) market share for any telecommunication service or network within a service area. Where such a threshold is crossed pursuant to an acquisition or restructuring, the entity must bring its market share below 50% (Fifty Percent) within 1 (one) year from the date of completion of the transaction or the tribunal’s approval of the scheme, as applicable.
VI. Spectrum Holding Limits
(a) The authorised entities must ensure that no restructuring or acquisition results in their total access spectrum holding exceeds the spectrum cap prescribed in the applicable Notice Inviting Application (NIA) for spectrum auction, as last published by the DoT prior to the relevant application, tribunal approval, or acquisition offer.
(b) If post-transaction spectrum holdings exceed the prescribed cap, the entity must reduce its holding within 12 (twelve) months through permitted measures such as spectrum trading. By the eleventh month, the entity must either regularise compliance or vacate the excess spectrum by applying to the DoT and making full payment of all dues for the remainder of the spectrum assignment. No refund, set-off, or other monetary relief shall be available from the DoT in respect of such vacation.
(c) These restrictions shall apply only to access spectrum; other categories of spectrum may remain outside the cap, though all related payments under the terms of assignment must continue to be honoured.
VII. Liberalisation of Access Spectrum: Before applying for DoT approval for restructuring or acquisition, an authorised entity must ensure that any access spectrum held, whether administratively assigned or obtained against an entry fee under the Telegraph Act, has been fully liberalised in accordance with applicable rules, notifications, or directions issued by the DoT. This requirement applies to all authorised entities, including those with turnover below INR 50 crore (Indian Rupees Fifty Crores Only).
VIII. Payment of Spectrum Charges: Applicants for DoT approval of a proposed restructuring or acquisition must submit a computation of the total spectrum the authorised entity will hold post-transaction. This requirement applies to all entities, including those with turnover below INR 50 crore (Indian Rupees Fifty Crores Only). Based on the submission, the DoT shall calculate the applicable spectrum charges and specify the payment schedule, which must be followed by the authorised entity or proposed acquirer.
IX. Payment of Pending Amounts: Approval for any restructuring or acquisition may be granted only if the authorised entity has cleared all pending amounts due to the DoT, including applicable interest, unless a court order injuncts such payment. In cases where payment is stayed by a judicial order, the applicant must submit an undertaking to pay pending amounts and maintain an irrevocable on-demand bank guarantee for the total amount plus interest for 3 (three) years, or longer if court proceedings extend beyond this period. The bank guarantee will be encashed in favour of the DoT if the court ultimately rules in its favour. The DoT may also verify and recover any pending amounts at the time of application review or even after completion of the restructuring or acquisition. These obligations apply to all entities, including those with turnover below INR 50 crore (Indian Rupees Fifty Crores Only).
X. Particulars of a Scheme: An authorised entity shall ensure that the scheme for a proposed restructuring, in order to be considered for approval by the DOT shall provide all the requisite information provided under the Draft Rules.
XI. Conditions for Grant of DoT Approval: The DoT shall grant written approval for a proposed restructuring or acquisition if the following conditions are met:
(a) The draft restructuring scheme includes an undertaking that the resulting entity will comply with all terms and conditions of the authorisation, including any roll-out obligations;
(b) the authorised entity or proposed acquirer provides an undertaking stating that: (i) it is not a prohibited investor; (ii) it meets the eligibility criteria for grant of authorisation under the applicable rules, with supporting documents; and (iii) it will comply with all terms and conditions of the authorisation;
(c) in the cases involving 2 (two) authorised entities: (i) both entities hold authorisations for the same type of telecommunication service or network; or (ii) the authorisation of one entity covers the services and service area of the other entity;
(d) the entity subject to restructuring or acquisition has paid all pending amounts due to the DoT, and where applicable, submitted the required undertaking and on-demand bank guarantee;
(e) the proposed restructuring or acquisition complies with the market share restrictions under Rule 6 of the Draft Rules; and
(f) the proposed restructuring or acquisition satisfies all other conditions specified under these rules, including spectrum, liberalisation, and disclosure requirements.
XII. Transfer of Authorisation: The resulting entity or proposed acquirer must submit an application to the DoT, within 60 (sixty) days of tribunal approval, in the prescribed form, manner, and with applicable fees, requesting transfer or grant of authorisation for all service areas or areas of operation of the predecessor entity. The DoT shall, to the extent reasonably practicable, complete the transfer or grant of new authorisation within 60 (sixty) days of receipt of the application.
In cases involving 2 (two) authorised entities, transfer will be granted only if both entities held authorisations for the same type of telecommunication service or network, or if 1 (one) entity’s authorisation covers the services and areas of the other. For restructurings, the term of the transferred or granted authorisation shall equal the longer of the remaining durations of the predecessor entities’ authorisations, while the spectrum assignment period remains unchanged. This rule shall not apply where a Telegraph Act authorisation is restructured with an entity holding a longer-tenure authorisation under the Act.
[1]https://dot.gov.in/sites/default/files/Gazette%20Notification%20of%20Draft%20Telecommunications%20%28Regulation%20of%20Restructuring%20or%20Acquisition%20of%20Authorised%20Entities%29%20Rules%2C%202025.pdf