Telecom stocks decline after Cabinet nod for 3G spectrum auction

Three telecom stocks fell by 2.16% to 3.86% at 11:45 IST on BSE after the Cabinet has approved the proposal of the Department of Telecommunication to proceed with auction in 2100 MHz band alongwith 800, 900 and 1800 MHz bands.

The Union Cabinet made the announcement yesterday, 28 January 2015

Meanwhile, the S&P BSE Sensex was down 126.28 points or -0.41% at 29,437.50.

Among telecom stocks, Bharti Airtel (down 2.38%), Idea Cellular (down 3.86%), and Tata Teleservices (Maharashtra) (down 2.16%) declined. MTNL (up 1.07%) and Reliance Communications (up 0.25%) gained.

The Union Cabinet, chaired by the Prime Minister Narendra Modi, yesterday, 28 January 2015 has approved the proposal of the Department of Telecommunication (DoT) to proceed with auction in 2100 MHz band alongwith 800, 900 and 1800 MHz bands. The Reserve price approved for 2100 MHz Band is Rs 3705 crore pan-India per MHz.

A 5 MHz Block will be offered in all service areas except Jammu & Kashmir, Bihar, Himachal Pradesh, West Bengal and Punjab. Thus a total of 85 MHz in 17 Licensed Service Areas (LSAs) is being put to auction. The estimated revenues from the auction of 2100 MHz Band are Rs 17555 crore of which Rs 5793 crore is expected to be realized in the current financial year ending 31 March 2015 (FY 2015).

The 2,100 MHz band is being used for providing 3G mobile services.

Meanwhile, the Department of Telecom (DoT) in a circular dated 27 January 2015 said that it has postponed until 4 March 2015, the auction of mobile phone airwaves which was earlier slated to start on 25 February 2015. The last date of submission of applications by mobile operators has also been moved to 16 February 2015 from 6 February 2015.

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