www.rupeedesk.in
Stocks of telecom companies are expected to bounce back and register some gains next week, but the underlying trend remains weak with stocks trading close to their crucial support levels. Stocks have been weak after companies having committed huge sums for acquiring spectrum for a period of 20 years, with the combined bids at 611.62 bln rupees at the spectrum auctions held earlier this month.
On apportioning the total spectrum payout over life of spectrum (20 years) the impact on cost per minute of large telcos is likely to range from 0.46 paisa per minute to 5.50 paisa per minute. Telecom companies already remain highly leveraged, with the estimated total debt for the industry currently at about 2.5 trln rupees.
Both Bharti (Airtel) and Idea (Cellular) have corrected significantly since auctions began, as concerns mounted on additional debt burden for spectrum payments as well as potential entry of RIL (Reliance Industries Ltd) Jio in voice, which still accounts for chunk of industry revenues. Reliance Industries' telecom arm Reliance Jio Infocomm had acquired voice-centric 1,800 Mhz spectrum in 14 circles in the auctions.
Stocks of telecom companies are expected to bounce back and register some gains next week, but the underlying trend remains weak with stocks trading close to their crucial support levels. Stocks have been weak after companies having committed huge sums for acquiring spectrum for a period of 20 years, with the combined bids at 611.62 bln rupees at the spectrum auctions held earlier this month.
On apportioning the total spectrum payout over life of spectrum (20 years) the impact on cost per minute of large telcos is likely to range from 0.46 paisa per minute to 5.50 paisa per minute. Telecom companies already remain highly leveraged, with the estimated total debt for the industry currently at about 2.5 trln rupees.
Both Bharti (Airtel) and Idea (Cellular) have corrected significantly since auctions began, as concerns mounted on additional debt burden for spectrum payments as well as potential entry of RIL (Reliance Industries Ltd) Jio in voice, which still accounts for chunk of industry revenues. Reliance Industries' telecom arm Reliance Jio Infocomm had acquired voice-centric 1,800 Mhz spectrum in 14 circles in the auctions.
