Telcos need to obtain Unified License, buy spectrum to continue services - Angel Broking

Telecom companies seeking permits would have to obtain Unified License and buy spectrum separately to continue their operations in respective circles. As the regime has changed, licenses and spectrum are two separate things. Previously, the spectrum was with the license at a cost of Rs.1,658cr. The license can continue but the spectrum will have to be bought by the telecom companies said Telecom Minister Kapil Sibal, on terms of Supreme Court judgment. Earlier, as per media reports, the DoT had communicated to Vodafone and Loop Telecom that their licenses cannot be extended in certain circles where the permits are due for renewal in 2014. The companies would need to bid for airwaves to continue their services in those circles and a similar communication would be sent to Bharti Airtel as well. As per Telecom Minister, the Unified License will be ready in the next 8-10 days for companies to apply for. Vodafone, Loop and Bharti Airtel have approached court against government's plan to auction spectrum that they currently hold and have sought extension of license using the same spectrum.

The spectrum identified for auction in 900MHz includes 8MHz held by Bharti Airtel and Vodafone each in Delhi circle; 8MHz each of Loop Mobile and Vodafone in Mumbai; and in Kolkata 6.2MHz spectrum of Bharti Airtel and 7.8MHz of Vodafone that is due for renewal in 2014. The auction of the identified spectrum was scheduled to start from March 11 but none of the companies applied to bid for these airwaves, thus leading to a failure of the auction. Government has announced that it will conduct third round of auction and the details of auction are expected to be finalized soon. This move, if finalized, will be negative for incumbent operators whose licenses are coming up for renewals from 2014. We continue to remain Neutral on the telecom sector.

Source : Equity Bulls

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