Shares of telecom service providers soared up after the Telecom Commission put the onus onto the Telecom Authority of India (TRAI) asking the new Trai Chairman Rahul Khullar to study and analyse the reserve prices proposed and their impact.
Shares of Bharti Airtel were up 1.02 percent, Idea Cellular gained 1.42 percent, Tata Communications moved up 1.96 percent and Reliance Communications gained 2.29 percent.
This will be the third such analysis by the regulator in the last one and a half months. The results of the study will be forwarded to an empowered group of ministers' (EGoM) panel, headed by Finance Minister Pranab Mukherjee, to take a final call on the issue.
"The analysis by TRAI is expected by the end of May which would be forwarded to the EGoM for the final decision. The EGoM is expected to meet in the first week of June. The postponement of pricing and a re-analysis of the impact would make us believe that the government is looking to consider all stakeholders' viability. This would bring relief to telecom companies," an Aditya Birla Money report stated.
The commission on Saturday had asked TRAI to complete the analysis by 31 May. Department of Telecom (DoT), which will then take its own recommendations and analysis to the Empowered Group of Ministers (EGoM) for a final decision.
“We will ask Trai to do an analysis. This will cover various scenarios: what will be the impact on tariffs if the cost escalation due to the new reserve price is fully passed on to consumers and when it is fully absorbed by telcos? What will be the cost impact for telcos if only new spectrum is auctioned at the new price and what will the impact be if spectrum already held by telcos is also converted to new, technology-neutral spectrum at the new prices? Also, Trai will have to do a circle wise analysis,” Telecom Secretary R Chandrasekhar had said.