Bharti Airtel falls 2% on telecom panel's opposition to spectrum price cut

Shares in Bharti Airtel, India's biggest mobile carrier, and Aditya Birla-promoted Idea Cellular fell on Thursday after a telecom panel reportedly questioned Telecom Regulatory Authority of India's (TRAI) proposal to cut minimum auction prices for mobile phone spectrum by up to 60 per cent. As of 09.16 a.m., Bharti shares traded 2.1 per cent lower at Rs 315.15, while Idea Cellular dipped 0.72 per cent to Rs 172.25. Bharti was the top Nifty loser. The Department of Telecommunications (DoT) panel has asked telecom regulator TRAI to "reconsider" its decision to slash spectrum prices, sources said. In September, TRAI had recommended a 37 per cent cut in the all-India reserve price of the 1800 megahertz frequency band that are used for basic mobile services. The suggested new price was Rs 1,496 crore per megahertz. It recommended around a 60 per cent cut in the reserve price of the more-efficient 900 megahertz band that will be auctioned in three key cities - Delhi, Mumbai and Kolkata - as Bharti and Vodafone's licenses are due for renewal next year. TRAI recommended a cut in spectrum prices after telecom companies showed little interest in two previous auctions. The third round of spectrum auction is expected to be held in January 2014. The DoT also opposed TRAI's recommendation that the annual spectrum usage charge be cut from 3-8 per cent currently to a flat 3 per cent of companies' revenue for the spectrum they buy from auctions. The panel has also opposed the regulator's recommendation that carriers should be allowed to trade spectrum they buy through auctions, including the third-generation (3G) spectrum they bought in a 2010 sale. The panel's recommendation is likely to be discussed by the Telecom Commission - an inter-ministerial body - on October 3. After the Telecom Commission arrives at a conclusion, the views of the inter-ministerial panel will be placed before Empowered Group of Ministers on spectrum, headed by Finance Minister P Chidambaram. The government has made provision of about Rs 11,000 crore from spectrum auctions for financial year 2013-14. (With inputs from agencies)

Bharti Airtel falls 2% on telecom panel's opposition to spectrum price cut

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