Idea Cellular shares dipped as much as 6.52 per cent on Thursday on reports that the company may spend $1.3 billion in adding data spectrum in upcoming auction around July.
According to CLSA estimates Idea will still have to spend $2 billion for 3G/4G coverage, which will further add to the company’s interest costs and debt, and increase the net debt-to-EBITDA ratio to 3.4x in FY17.
Idea, Bharti Airtel and Vodafone’s India unit have been spending heavily to ramp up their 4G networks ahead of the launch of Reliance Industries’ 4G telecom service later this year
Rival Bharti Airtel may selectively buy 4G airwaves in coveted 700 Mhz band in a few circles, report added.
The share price of Idea Cellular closed 5 per cent down at Rs 113.60.
(With inputs from Reuters)