Trai Spectrum Sharing Recommendation Elicits Jump in Telecom Stock Prices

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Trai Spectrum Sharing Recommendation Elicits Jump in Telecom Stock Prices
Telecom stocks rose by as much as 5 percent after regulator Trai recommended allowing sharing of all categories of airwaves held by operators.

Shares of Bharti Airtel surged 4.81 percent to Rs. 353.25 and was the top gainer among the 30-Sensex blue-chips.

Idea Cellular rose by 4.83 percent and Reliance Communications was up 3.72 percent on the BSE.

"We believe the recommendations would ensure better usage of spectrum held by existing operators. A modest positive reaction by telecom stocks today reflects the marginal benefit from the Trai announcement. We maintain our positive stance on telecom stocks and continue to like Bharti Airtel and Idea Cellular," IT and Telecom analysts at IDFC said in a report.

"All access spectrum i.e. spectrum in the bands of 800/900/1800/2100/2300/2500MHz will be sharable provided that both the licensees are having spectrum in the same band,"

Telecom Regulatory Authority of India (Trai) had said in its recommendation on Guidelines on Spectrum Sharing yesterday.

At present, telecom operators have been allocated airwaves frequency in 800MHz (CDMA), 900MHz, 1800MHz, 2100MHz (3G), 2300MHz and 2500MHz (4G) for wireless telecom services.

The move to allow sharing of all kind of airwaves if approved by the government, will benefit incumbent players like Airtel, Vodafone, Idea Cellular, Reliance Communications, Aircel and Tata Teleservices to bring down cost of spectrum ownership.

At present, telecom operators are allowed to share passive infrastructure like mobile towers which has helped them reducing operational cost but not active infrastructure like spectrum.

The government in February 2012 in-principle approved sharing of only those spectrum under new licencing regime which have been purchased through spectrum auction to increase interest of bidders and enhance revenue generation in the auction.

It in-principle approved sharing of spectrum allocated without auction on condition that companies holding such airwaves will have to pay one-time spectrum charge which cumulatively amounted to about Rs. 30,000 crore for both GSM and CDMA spectrum as estimated by DoT last year.

Edited by NDTV staff from original story by PTI
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Further reading: 3G, 4G, CDMA, DoT, GSM, Shares, Spectrum, Spectrum Auction, Telecom, Trai
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