Telecom stocks dial in least losses on auction boost

By: | Published: January 7, 2015 12:07 AM

Telecom stocks were least affected in Tuesday’s selloff when the benchmark Sensex...

Telecom stocks were least affected in Tuesday’s selloff when the benchmark Sensex witnessed the biggest single day fall in five and half years.

Shares of Reliance Communications fell the most on BSE, down 2.5% , followed by Idea Cellular, down 2.15%

Shares of Bharti Airtel fell 2.4% intra-day on BSE, before closing at R354.40, down (0.78%).

The Union Cabinet on Monday approved the largest ever telecom spectrum auction through which it intends to raise at least R64,840 crore from the sale of 800 MHz, 900 Mhz and 1,800 MHz band airwaves.

According to reports, the reserve price for 800 MHz has been fixed at R3,646 crore, the price for 900 MHz stands at R3,980 crore and for 1,800 MHz spectrum at R2,191 crore.

Market experts believe that the auction is a positive for the entire sectors and the additional sale of 800 MHz and 2100 MHz may reduce pressure on the bidders. Further it is believed that telecom players like Idea Cellular might see some relief as companies like Bharti Airtel will now bid aggressively for 2100 MHz easing bidding pressure for Idea with regards to the 900 MHz spectrum.

According to an IDFC Research note, dated December 31,2014 ample availability of spectrum in the 2100 MHz band will ensure there is no irrational bidding for 900 MHz spectrum. Also, 2100 MHz auction would increase accrual to the government exchequer. “We see this as a major positive development for both industry and government,” it added.

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