Telecom stocks: Spectrum shopping spree

Telecom stocks: Spectrum shopping spree

Share price of Bharti Airtel and Mukesh Ambani’s Reliance Industries surged on Wednesday, a day after the telecom companies revealed their telecom spectrum shopping list. Reliance Industries shares surged 1% to hit an intra-day high of Rs 2,133 per share, while Bharti Airtel was among the top gainers on Sensex, up 1.5% to hit a high of Rs 549.5 apiece. Both Bharti Airtel and Reliance Industries-owned Jio strengthened their network infrastructure, purchasing Rs 18,700 crore and Rs 57,000 crore worth of spectrum, respectively. Meanwhile the third private telco, Vodafone Idea was down nearly 2% after making a meagre spectrum purchase worth Rs 1,990 crore.
Bharti Airtel acquired 355.45 MHz of spectrum in 19 out of 22 circles, while Jio acquired 488.35 MHz of spectrum across all 22 circles. On the other hand, Vodafone Idea acquired just 11.8 MHz of spectrum to cover minor gaps in five circles.

Bharti and Jio picked up a significant share of the spectrum on offer across key bands to cover up for the bandwidth expiring later this year, while also preparing to expand their coverage as well as capacity across the country. On the other hand, VIL increased its holding marginally on an already large spectrum portfolio.
Reliance Jio and Bharti Airtel’s purchase could be owing to the renewal of existing spectrum, investment in lower bands to deepen coverage, and investment in capacity bands to de-bottleneck networks and prepare for a seamless switch to 5G in the future.

Interestingly, the debt-laden Vodafone Idea’s purchase was 76% lower than what it was required to shell out for renewal of spectrum.
Prior to the spectrum auction, Reliance Industries-owned Jio, announced its new 4G feature phone, offering plans with 12 and 24 months of recharge and monthly data allowance of 2GB, worth Rs 1,499 and Rs 1,999.

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