Telecom stocks edge lower in volatile trade

Three telecom stocks lost 0.31% to 4.58% at 12:18 IST on BSE after the Union Cabinet yesterday, 12 August 2015, gave its approval to the guidelines on spectrum sharing, arising from the recommendations of the Telecom Regulatory Authority of India.

Idea Cellular (down 0.31% at Rs 161.15), Reliance Communications (down 4.58% at Rs 63.60) and Mahanagar Telephone Nigam (down 2.14% at Rs 18.25) edged lower. Tata Teleservices (Maharashtra) (up 2.17% at Rs 7.06) and Bharti Airtel (up 1.8% at Rs 404.85) edged higher.

Meanwhile, the S&P BSE Sensex was up 83.91 points or 0.3% at 27,596.17.

As per the spectrum sharing guidelines, spectrum sharing would be allowed only for the access service providers in the first instance in a Licensed Service Area (LSA), where both the licensees are having spectrum in the same band. Leasing of spectrum will not be permitted. For the purpose of charging Spectrum Usage Charges (SUC), licensees shall be considered as sharing their entire spectrum holding in the particular band in the entire LSA. All access spectrum including traded spectrum will be sharable provided that both licensees are having spectrum in the same band. The right to share spectrum shall be subject to fulfilment of relevant license conditions and any other conditions that may be specified by the licensor/Government from time to time. A licensee shall not be eligible to share its spectrum, if it has been established that it is in breach of terms and conditions of the licence, and the licensor has ordered for revocation/termination of its licence.

Guided by the principle of ease of doing business, the Cabinet also decided that both licensees sharing the spectrum shall jointly give a prior intimation for sharing the right to use the spectrum at least 45 days before the proposed effective date of the sharing. Both the licensees shall also give an undertaking that they are in compliance with all terms and conditions of the guidelines for spectrum sharing and licence conditions, and will agree that in the event it is established at any stage in the future, that either of the licensee was not in conformance with the terms and conditions of the guidelines for spectrum sharing or/and of the licence, at the time of giving intimation for sharing of right to use the spectrum, the Government will have the right to take appropriate action which among other things may include annulment of sharing arrangement. A processing fee, of Rs 50,000 which could be modified from time to time, shall be payable individually by each licensee for each service area at the time of intimation.

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