Idea Cellular sinks 8.4% as spectrum bidding hots up

Shares of telecom companies slumped today as rising prices in the spectrum auction are seen reducing potential profit margins.

Prices for 900 Mhz band mobile phone spectrum in Delhi rose 90 per cent from the floor price by Day 5 of the auction, government data showed late on Friday.

Idea Cellular plunged 8.4 per cent while Bharti Airtel fell 2.7 per cent.

Morgan Stanley increased regulatory risk forecast for the sector, saying per MHz pricing has moved up around 38 per cent in the spectrum auction.

The research house lowered its target price for Bharti Airtel by Rs 20 a share to Rs 409 and that of Idea by Rs 16 to Rs 202 rupees a share, while maintaining their "overweight" rating on the sector.\

Copyright: Thomson Reuters 2014