REUTERS - Shares in mobile network operators rallied on Tuesday with Bharti Airtel Ltd
The Indian mobile unit of Russian conglomerate Sistema
Leading carriers Bharti Airtel and the Indian unit of Vodafone Group Plc
"Earlier the expectation was these operators will be compelled to bid," said a Mumbai-based telecommunications analyst at a foreign bank. "Now that they did not bid, it is almost certain that the prices will have to come down," said the analyst, who did not want to be named as he is not authorised to speak to the media.
Carriers mostly shunned another auction in November, saying the minimum bid price for the airwaves was too high, forcing the government to cut prices by about 30 percent in some key zones. That cut was not sufficient, the industry says.
Bharti Airtel would have had to pay about $1.4 billion at the current reserve price to buy back the premium band airwaves in the Delhi and Kolkata service areas, according to an estimate by BNP Paribas.
Bharti Airtel shares were trading 3.8 percent higher at 318.90 rupees at 10:52 a.m., while shares in Idea Cellular Ltd
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Idea is not required to bid in the March auction, but any possible cut in reserve price will also help it when it buys airwaves in subsequent auctions.
"There are chances that the government will reduce prices significantly," said Archana Shivane, a sector analyst at K.R. Choksey Shares and Securities Pvt Ltd in Mumbai. "That will consequently make Bharti, Vodafone, Idea pay lower spectrum prices to government. So ultimately that will come on (their) balance sheet in terms of lower debt," she said.
(Reporting by Devidutta Tripathy in New Delhi and Rafael Nam and Aradhana Aravindan in Mumbai; Editing by Matt Driskill)