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Telecom stocks continue to fall due to TRAI recommendations since yesterday.

Equity Trading

Telecom stocks continue to fall

Telecom Regulatory Authority of India proposed a reserve price of Rs 3622 crore for each MHz of spectrum in the 1,800-MHz band and proposed to double the base price of airwaves in the 800 MHz and 900 MHz bands at Rs 7244 crore per unit for pan-India bandwidth in the auction of radio waves which is to be held following the Supreme Court (on 2 February 2012) canceling 122 licenses it allotted after January 2008. For 4G airwaves in the 700-MHz band, it has suggested quadrupling the price to Rs 14488 crore per unit. Largest telecom operator down 5.74%, Idea Cellular down 6.49%, Tata Tele-services -Maharashtradown 2.76% and Reliance Communications down 2.27%.

Reports suggest that these recommendations may have a crippling impact on telecom firms. Trai’s also proposes to charge existing players for surplus spectrum that could result in fees (in thousands of crores)¬†due from incumbents, such as Bharti Airtel, Idea Cellular among others.

 

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