Most telecom stocks were trading in the green on the BSE around noon on January 7 on reports that the Department of Telecommunications (DoT) invited applications for the spectrum auction scheduled to start on March 1, 2021.
The union cabinet approved a proposal for the auction of 2,251.25 megahertz (MHz) of spectrum worth Rs 3.92 lakh crore at the base price on December 17, 2020.
Shares of Bharti Airtel jumped more than 5 percent while those of Vodafone Idea rose almost 3 percent in intraday trade, which boosted the BSE telecom index.
The telecom index jumped 4 percent in intraday trade. At 1155 hours, the BSE Telecom index was 3.69 percent up at 1,378 with 9 stocks in the green and 5 in the red.
Shares of Bharti Airtel, Indus Towers, GTPL, Vodafone Idea and HFCL were the top gainers while OnMobile Global, Reliance Communications and MTNL were the top losers.
Brokerage firm ICICI Securities said the DoT had released a notice inviting applications (NIA) for the spectrum auctions (in 700, 800, 900, 1,800, 2,100, 2,300 and 2,500MHz bands), which are scheduled to begin from March 1. The auction does not include the popular 5G spectrum band (3,300-3,600MHz).
The upcoming auction includes spectrum due for renewal in CY21 too. The auction guidelines are broadly in line with the regulator’s recommendation on spectrum reserve prices and block size. The key date to watch for is February 5, 2021, the deadline to submit applications.
ICICI Securities expects the final auction prices across spectrums to be equal to the reserve prices due to significant spectrum supply and likely limited demand for expiring spectrums.
"Bharti Airtel has 57MHz in 1800MHz band and 6.2MHz in 900MHz band coming up for renewal in CY21, but it has amassed huge spectrum via M&As, which should significantly lower its renewal requirement in the upcoming auction," ICICI Securities said.
"Vodafone Idea has 46MHz spectrum in 1800MHz band and 6.2MHz in 900MHz due for renewal, and we expect very little renewal requirement for it as well," said the brokerage.
Telecom analysts are of the opinion that India's wireless (mobile) subscribers count is recovering.
India's mobile subscriber base shrank by nearly 2 crore between March and June 2020. As per the Telecom Regulatory Authority's (TRAI's) subscription report for June, India's mobile subscriber count stood at 114 crore during the peak of the COVID-19 pandemic in the country.
As per the telecom watchdog's March subscription report, India's mobile subscribers base was 116 crore at the end of FY20.
As per the latest TRAI data, the subscriber base expanded to 115.2 crore at the end of October 2020.
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