Telecom stocks jump ahead of spectrum price meet

Four telecom stocks rose by 1.80% to 4.68% at 13:45 IST on BSE on reports the Telecom Regulatory Authority of India's board will meet today, 6 September 2013, to consider spectrum pricing.

Tata Teleservices (Maharashtra) (up 4.68%), Bharti Airtel (up 3.70%), Idea Cellular (up 3.38%) and Reliance Communications (up 1.80%), edged higher.

The BSE Sensex was up 228.46 points, or 1.20% at 19,208.22.

According to media reports, the Telecom Regulatory Authority of India (TRAI) board which is due to meet today, 6 September 2013, to consider spectrum pricing may suggest slashing of spectrum prices by as much as 75% for 800 megahertz (Mhz) and 900 Mhz spectrum in the upcoming auction. TRAI may also recommend spectrum trading and sharing, reports suggested. However, TRAI is a recommending body, final decision will be taken by DoT and the Cabinet, reports added.

For existing telecom companies a reduced base price is vital as this will also be linked to costs they will incur in renewing their mobile permits from next year.

Auction of 2G mobile phone airwaves came after the Supreme Court ordered the cancellation of permits granted to eight carriers in a scandal-tainted process in 2008. The Supreme Court in February last year had cancelled 122 2G telecom licences.

The government in the previous two rounds of spectrum auction was able to sell airwaves for around Rs 13000 crore, way below its target of garnering about Rs 40000 crore, as operators said the reserve price was too stiff.

In the first auction held in November 2012, the government had earned Rs 9407.64 crore by auctioning 1,800 MHz spectrum.

In the second auction held in March 2013, the government got just Rs 3639 crore from the auction of 800 MHz CDMA band where Sistema Shyam Teleservices was the lone bidder for eight circles.

Powered by Capital Market - Live News