The Hindu Business Line : Bharti Airtel declines on spectrum fears

Mumbai, Dec. 13 Bharti Airtel was the biggest loser among the 30 Sensex stocks on Thursday due to spectrum fears. There are concerns now that Bharti will be getting the shorter end of the additional spectrum. It was down 6.24 per cent to close the day at Rs 987.80 on the Bombay Stock Exchange and by 6.67 per cent on the National Stock Exchange to close at Rs 988.

Analysts say that there is a lot of uncertainty at the moment regarding the whole spectrum issue.

The TDSAT interim order is largely negative for all big GSM players. But it’s particularly negative for Bharti Airtel as it allowed Government to allocate spectrum to new players. . These tighter subscriber norms mean that Bharti will not be getting any additional spectrum for 2G mobile for years. Less spectrum would also mean extra capital expenditure to accommodate the huge growth of subscribers, says analysts tracking the telecom sector.

“Bharti Airtel is adding close to two million subscribers a month and without spectrum the only option is to add further equipment,” explained an analyst. Bharti’s appeal for auction has also been rebuffed by the Communication Ministry saying that it was illegal. Now the 3G spectrum is also not guaranteed to them as it will have to participate in an open auction, which again could drive up the price of acquiring radio waves, the analyst added.

Surprised analysts

“Bharti has the biggest share of the market all this while without any spectrum, so how does it matter now? They have managed to grow and their quality has improved”, said a puzzled analyst.

Until the Government comes out with its final decision it would be too early to take a call. “Depends on who will get this much needed spectrum, the GSM players or the CDMA players. If the solution is not favourable for the GSM providers, Bharti would be affected in a big way”, said an analyst with a with a domestic brokerage.

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