Five telecom stocks rose by 2.45% to 11.21% at 15:15 IST on BSE after the Cabinet approved spectrum trading guidelines, which will allow telecom companies to buy and sell telecom spectrum from each other.
Reliance Communications (up 11.21%), MTNL (up 6.31%), Tata Teleservices (Maharashtra) (up 4.97%), Idea Cellular (up 2.53%) and Bharti Airtel (up 2.45%), edged higher.
The S&P BSE Sensex was up 432.78 points, or 1.71% at 25,750.65.
The Union Cabinet today, 9 September 2015, approved a proposal of the Department of Telecommunications (DoT) on guidelines for spectrum trading arising from the recommendations of the Telecom Regulatory Authority of India (TRAI).
Spectrum trading will allow the telecom companies (telcos) to buy and sell spectrum among themselves. The move is designed to allow telcos to utilize unused airwaves better. It also allows telcos to acquire spectrum outside of the current auction system.
As per the guidelines, telcos will have to inform the government 45 days before the transaction and will have to pay 1% of the transaction amount as trading fee.
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Existing rates as prescribed by the government from time to time for Spectrum Usage Charge (SUC) shall continue to apply on spectrum held by the buyer which includes the spectrum acquired through trading. Spectrum acquired through spectrum trading will be treated akin to spectrum acquired through auction.
A telecom service provider will be allowed to sell the spectrum through trading only after two years from the date of its acquisition through auction or spectrum trading or administratively assigned spectrum converted to tradable spectrum.
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