The central authorities are set to adopt new rules allowing telecom sector firms opt for mergers and acquisitions with other players in the market.

The Telecom Commission has agreed to the recommendations of the Telecom Regulatory Authority of India's (Trai) to ease mergers and acquisitions rules and allow spectrum-sharing among the telecom service providers.

The panel has also approved the implementation of a mechanism in which a one-time fee on operators will be charged on operators for holding spectrum beyond 6.2 mega hertz, according to telecom secretary R Chandrasekhar.

"Recommendations with the cases of below 35 per cent market share (and) spectrum not exceeding 25 per cent of the total spectrum are cleared and above that we will be requesting Trai to suggest some guidelines for considering cases where the market share may be 35 per cent," said Chandrashekhar.

Under the new rules, the mergers and acquisitions will be eligible for automatic approval if the combined market share of the new entity is less than 35% and spectrum holding is less than 25%.

He said that in cases of mergers and acquisitions where the combined market share of the new entity is more than 35% but less than 60%, the TRAI would take a decision on the approval so as to avoid the creation of monopolies.

The TRAI had earlier recommended allowing mergers and acquisitions in the sector industry if the combined market share of the new entity is less than 60 per cent. The move will allow the telecom sector, which has as many as 14 players, to consolidate.

The panel has also fixed the annual revenue share at a uniform 8% for all telecom service providers instead of 6%-10% share. Telecom secretary said that the new plans would be implemented in the next two years in a phased manner.