Idea Cellular, Videocon Industries gain after scrapping spectrum deal

Shares of Idea Cellular and Videocon Industries rose 0.61% and 0.09% respectively at 10:31 IST on BSE after announcing termination of an agreement for transfer of right to use Videocon Telecommunications' spectrum in Gujarat and Uttar Pradesh (West).

Meanwhile, the S&P BSE Sensex was up 165.41 points or 0.67% at 24,847.89

Idea Cellular rose 0.61% to Rs 98.95. The stock hit a high of Rs 100.60 and low of Rs 98.75 so far during the day. On BSE, so far 1.67 lakh shares were traded in the counter, compared with an average volume of 6.58 lakh shares in the past one quarter.

Videocon Industries rose 0.09% to Rs 109.50. The stock hit a high of Rs 110.80 and low of Rs 109.50 so far during the day. On BSE, so far 3,556 shares were traded in the counter as against average daily volume of 39,249 shares in the past one quarter.

Idea Cellular and Videocon Telecommunications (VTL) yesterday, 16 March 2016 mutually agreed to terminate their earlier agreement regarding 'Transfer of Right to Use 1800 MHz Spectrum' in two service areas with immediate effect. VTL is a subsidiary of Videocon Industries. Idea Cellular made the announcement before market hours today, 17 March 2016. It may be recalled that on 24 November 2015, the board of directors of Idea Cellular had empowered the company to enter into an acquisition agreement for right to use 1800 MHz spectrum of VTL, in the telecom service areas of Gujarat and UP (West) for an aggregate consideration of around Rs 3310 crore. The agreement was pursuant to the Department of Telecommunications (DoT) guidelines for trading of access spectrum by access service providers dated 12 October 2015. No joint intimation of this transfer agreement for right to use spectrum under spectrum trading guidelines was filed with DoT, by the parties. Also, there is no cost implication to the company on termination of the agreement, Idea Cellular said.

Meanwhile, Idea Cellular continues to aggressively launch its high speed mobile broadband 4G LTE services. The company has launched its 4G LTE services in the tenth telecom service area of Maharashtra & Goa, from Nagpur city, Idea Cellular said. The company remains on track to launch 4G LTE services in 750 key towns across 10 telecom circles latest by end of June 2016, it added.

Idea Cellular's consolidated net profit fell 0.4% to Rs 764.21 crore on 12.4% rise in net sales to Rs 9001.43 crore in Q3 December 2015 over Q3 December 2014.

Videocon Industries reported net loss of Rs 84.42 crore in the quarter ended 31 December 2015 as compared with net profit of Rs 18.61 crore in the quarter ended 31 December 2014. Net sales fell 1.6% to Rs 3084.13 crore in the quarter ended 31 December 2015 over the quarter ended 31 December 2014.

Idea Cellular is the third largest wireless operator in India. Videocon Telecommunications, a Videocon group company offers GSM mobile services under the brand name Videocon.

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