Telecom stocks gain ahead of telecom spectrum auction

Four telecom stocks rose by 0.6% to 1.6% at 10:45 IST on BSE on reports Department of Telecommunications will start the biggest ever auction of 2G and 3G spectrum today, 4 March 2015.

Meanwhile, the S&P BSE Sensex was up 296.99 points or 1% at 29,890.72.

Among telecom stocks, MTNL (up 0.92%), and Reliance Communications (up 0.6%) gained. Tata Teleservices (Maharashtra) was flat.

Idea Cellular gained 1.6%. Idea Cellular after market hours yesterday, 3 March 2015 in a clarification with regard to news item titled "Idea in 3 year pact with Ericsson" said that while it is policy of the company not to comment on media reports, the company said that the news item is relating to purchase of telecom equipments in the regular course of business and is not anything extra-ordinary that would trigger any reporting requirement.

Bharti Airtel rose 1.1%. With respect to media reports titled Airtel, Ericsson extend services deal, Bharti Airtel after market hours yesterday, 3 March 2015, clarified that it is a routine ordinary course of business transaction wherein the company has renewed its existing agreement with Ericsson. The transaction does not have any material or significant impact on the operations of the company, Bharti Airtel said.

Eight firms will bid to acquire radiowaves in four bands, which may fetch the government over Rs 82000 crore, report added. The government plans to sell 380.75 megahertz (MHz) of spectrum in three bands the premium 900 MHz band, 1800 MHz and 800 MHz, besides 5 Mhz in the 2100 Mhz band across 17 out of 22 telecom areas in the country.

Most of the spectrum being put up for the auction is presently held by Airtel, Vodafone, Idea Cellular and Reliance Communications. Their licences are expiring in 2015-16. It is mandatory for these companies to bid for spectrum if they have to continue offering mobile and other telecom services as their permit is expiring.

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