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This article is more than 1 year old.

Vodafone Idea, Airtel fall despite govt granting 2-year moratorium for spectrum dues

Mini

Telecom stocks turned negative after opening higher on Thursday despite Finance Minister Nirmala Sitharaman announcing the previous day that the government has decided to grant a 2-year moratorium for telecom companies to pay their spectrum dues.

Vodafone Idea, Airtel fall despite govt granting 2-year moratorium for spectrum dues
Telecom stocks turned negative after opening higher on Thursday despite Finance Minister Nirmala Sitharaman announcing the previous day that the government has decided to grant a 2-year moratorium for telecom companies to pay their spectrum dues.
Bharti Airtel rose as much as 1.5 percent in the opening but later pared gains and fell 2.2 percent to Rs 427.45. At 9:40 AM, Airtel was trading 1.8 percent lower at Rs 429 per share.
Vodafone Idea added 15 percent intraday to Rs 8.13 per share but later fell 31 percent to Rs 6.21. At 9:40 AM, it was trading 10 percent lower at Rs 6.37.
In comparison, the BSE Sensex was trading 0.01 percent higher at 40,650.
The FM said that the committee of secretaries looked into issues in the telecom sector exhaustively. The government subsequently decided to defer receipt of spectrum auction instalment due from TSPs (telecom service providers) for years 2020-2021 and 2021-2022.
The finance minister further elaborated that the deferred amounts of spectrum fees due from telcos will be equally spread over the remaining instalments.
This move will be beneficial for incumbents like Vodafone Idea and Bharti Airtel who reported a combined loss of Rs 74,000 crore for the second quarter ended September 30, 2019, after the Supreme Court asked telecom companies to pay Rs 92,000 crore to the government as Adjusted Gross Revenue (AGR).
The telecom stocks had been on an upward trend since November 15 after CNBC-TV18 reported that the government is mulling setting a minimum price for mobile calls and data usage. The sentiment was further lifted after these companies announced that they will hike mobile call and data tariffs from December.
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