New entrant Etisalat which was planning to acquire Allianza Infratech’s licences for the circles of Madhya Pradesh and Bihar, got a bitter taste of the lock-in period introduced by DoT as its proposal got rejected.

The lock-in period prevents fly-by-night operators to enter the field and offload stake and thereby rope in money. It prevents promoters from offloading without issue of any fresh equity for a period of three years.

In case of Allianz, the firm is yet to make any investments in its area of licence and by the merger it would have gained financially. There was no issuance of any fresh equity and the proposed deal was merely a transfer of ownership, felt the DoT.