Telecom Stocks Outlook for the week (22-26.10.2012)


Telecom stocks are expected to trade in a narrow range next week, and investors would keep a close watch on Cabinet decision over one-time spectrum fee, likely to be taken in the coming week. Uncertain regulatory environment and expected outgo of billion of rupees on account of spectrum re-farming, one-time spectrum fee and participation in the 2G auction bids have kept investors at bay.
   
The Empowered Group of Ministers headed by Finance Minister P. Chidambaram has decided to charge companies for spectrum held beyond 4.4 MHz prospectively, and additional retrospective charge on operators that held spectrum beyond 6.2 MHz from May 2008 onwards. The Telecom Commission has also recommended that operators that are currently using the 900 MHz band should be moved to 1,800 MHz band, once their existing licences come up for renewal.
 
The Cabinet is expected to take a final call on re-farming next month before the auction commences from Nov 12. Bharti Airtel is expected to trade sideways with a negative bias next week.

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