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 on Thursday 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.
Auction fetches Rs.1.10 lakh crore
up for auction
of fierce bidding
rounds of bidding
| The auction included airwaves held under nine licences of Idea Cellular, seven each of Reliance Telecom and Vodafone and six of Bharti Airtel that are set to expire | Telecos are required to pay upfront 33 per cent of the bid amount for the 2100 MHz, 1800 MHz and 800 MHz bands within 10 calender days of the close of auction. | The winning bidders will pay the rest of the amount over a period of 12 years - two years moratorium and then 10 yearly installments. | |
| Rs.1,09,874 cr: Total value of bids that the government got in spectrum auction | The spectrum auction conducted in 2010 brought about Rs.1.06 lakh crore, which included Rs.30,000 crore payment from BSNL and MTNL |
