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Telcos shares dip on financial burden concerns post auctions

Press Trust of India  |  Mumbai 

Shares of telecom companies fell as much as 5.64 per cent on rising concerns that the high spectrum payment by these companies in the recent auctions would prove to be a financial burden for the sector.

According to market experts, high spectrum prices in the just-concluded auctions are likely to put financial pressure on the Indian telecom operators, who will eventually pass on the impact in form of rise in tariffs to consumers.

Shares of Idea Cellular settled for the day down 4.96 per cent at Rs 171.45 on the BSE. Bharti Airtel also settled in the negative territory with losses of 5.64 per cent at Rs 376.20.

Reliance Communications' shares also ended in the negative zone with losses of 3.56 per cent at Rs 58.25 and Tata Teleservices fell by 1.54 per cent to Rs 7.68.

Telecom Minister Ravi Shankar Prasad had yesterday said as per an analysis, "The yearly load on telecom operators is going to be about Rs 5,300 crore...And 1.3 paise per minute (mobile phone) call."

The spike in these stocks assumes significance as the BSE Sensex ended almost flat at 27,458.64 points, up 1.06 points.

The biggest telecom spectrum auction ended on Wednesday after 19 days of fierce bidding and fetched about Rs 1.10 lakh crore to the government.

First Published: Fri, March 27 2015. 18:02 IST