Telecom shares trading lower on DoT notice; Bharti Airtel, Idea tank 2%

NEW DELHI: Shares of Bharti Airtel and Idea Cellular slipped over 2 per cent in early trade on Monday after the Department of Telecommunications (DoT) on Friday asked Airtel to stop 3G services within three days in the seven circles in which the company does not have the required licenses.

At 09:40 am, Bharti Airtel was trading 2.11 per cent lower at Rs 304.50. It has hit a low of Rs 302 and a high of Rs 307 in trade today.

Idea cellular was trading 2.1 per cent lower at Rs 109.80. It has hit a low of Rs 109.05 and a high of Rs 111.50 in trade today.

Bharti Airtel might soon be slapped with another show cause notice for sharing its 3G airwaves with Vodafone and Idea, telecom department officials confirmed, ET reported.

“The telecom major might be asked to pay an additional Rs 500 crore in penalties for the alleged violation,” added the report. This implies, Bharti Airtel will be confronted with penalties totaling Rs 850 crore related to its 3G roaming pacts with Vodafone and Idea.

On Friday, the DoT had imposed a Rs 350-crore penalty on Bharti Airtel for offering high-end data services in Kolkata, Maharashtra, Gujarat and four other regions, where it does not have 3G frequencies.

“However, Bharti Airtel had filed a petition against the decision in the Delhi High Court. The hearing is scheduled on Monday,” Angel Broking said in a note.

“Bharti Airtel was offering these services in seven circles, where it does not have 3G spectrum, by signing intra-circle agreements with Vodafone and Idea Cellular,” the note added.

Idea Cellular already has a stay from the Delhi High Court against the stopping of 3G services through the intra-circle agreements. The three telcos (Vodafone, Idea and Bharti Airtel) together have 12 million 3G subscribers.

Angel Broking has a ‘neutral’ rating on the overall telecom sector.