Telecom stocks dip after TRAI sets higher price for 700 MHz spectrum

Shares of mobile service providers were trading with losses after the Telecom Regulatory Authority of India (Trai) has proposed auction of 700 MHz spectrum at a reserve price of Rs 11,485 crore per MHz.

This is the highest reserve price fixed for a band ever since the process for spectrum auction started nearly five years ago.

700 MHz is considered a good band for offering mobile broadband services / 4G. It is a much sought-after band for long-term evolution (LTE) deployment around the world due to its efficiency and higher penetration inside buildings. Due to lower frequency, it provides wider coverage, which reduces the number of towers required for setting up the LTE network and significantly cuts down capital expenditure involved in making the network live.

Reliance Communications was down 1.3%, Bharti Airtel eased 1.5% while Idea Cellular was down 1.1%.