Telecom stocks gained as much as 4 per cent in morning trade after the Cabinet approved relief measures for the financially stressed sector. The Cabinet yesterday allowed telcos to pay for spectrum over 16 years instead of 10 years and permitted them to hold more airwaves.
It also relaxed caps on holding spectrum, helping ongoing mergers like that between Vodafone and Idea as the combined entity would have breached the current limits in certain circles or telecom zones.
Reacting to the development, shares of Bharti Airtel spurted 2.62 per cent to an intra-day high of Rs 414, while Idea Cellular jumped 4.39 per cent to an early high of Rs 83.10 on the BSE.
The S&P BSE Telecom index also went up by 2.04 per cent to a high of 1,378.50 in morning trade.
The spectrum cap relaxation would also help billionaire Mukesh Ambani’s Reliance Jio to acquire the spectrum of Reliance Communications in certain bands.
The decision of the Cabinet headed by Prime Minister Narendra Modi came after a majority of telecom companies flagged their concerns over severe financial stress facing the sector due to intense competition unleashed by Reliance Jio’s rock-bottom tariffs.