In order to reduce call drops, the government on Wednesday allowed telecom operators to share airwaves in the same band. Cheering the news, the share price of telecommunication companies like Bharti Airtel, Idea Cellular and Reliance Communication opened 1.08 per cent, 2 per cent and 3.45 per cent higher at Rs 402, Rs 165 and Rs 68.95, respectively.
Bharti Airtel and Idea Cellular closed down 3.36 per cent and 2.57 per cent at Rs 384.35 and Rs 157.50, respectively, while Reliance Communication shares were down 9.38 per cent at Rs 60.40.
The decision will allow companies to share their unutilised spectrum. The move expected to improve cost efficiencies for telecom companies with increased capacity to carry voice and data traffic. However, the government did not make any mention of the much awaited norms on trading of airwaves.
According to the Ministry of Communications and Information Technology, Spectrum Usage Charges (SUC) rate of each of the licensees post-sharing shall increase by 0.5 per cent of Aggregate Gross Revenue (AGR).
Market analysts believe spectrum sharing norms don’t seem to be a game changer for telecommunication companies.
Edelweiss Securities in a research report said, “Although spectrum sharing is a positive for the operators, limitation of only intra-band sharing, higher SUC and strict spectrum caps, would limit the attractiveness of the spectrum sharing. It would be specifically beneficial for operators who have less than 5MHz spectrum in a given band, as spectrum sharing would enable them to upgrade technology. Large scale adoption of spectrum sharing would be negative for the telecom tower companies.”