​Telecom stocks under pressure as government approves higher 3G reserve price

MUMBAI: Shares of telecom companies were witnessing selling pressure after the Cabinet endorsed the telecom commission's recommendations on setting the reserve price for 3G spectrum at a little over Rs 3,700 crores. The reserve price is nearly 36 per cent dearer than what the TRAI had recommended.

The government expects to rake in at least Rs 80,000 crore from the spectrum auction.

"Cabinet has approved a reserve price of Rs 3,705 crore per MHz for 2100 MHz band (which is used for 3G mobile services)," said Telecom Minister Ravi Shankar Prasad.

The base price suggested by the Commission is around 11 per cent higher than what telecom firms paid for in the 2010 auction. It is also 36 per cent higher than sectoral regulator TRAI's recommendation of Rs 2,720 crore per Mhz.

At 10:00 a.m.; Bharti Airtel was at Rs 366.25, down 2.01 per cent, on the BSE. It touched a low of Rs 365 and a high of Rs 374.95 in trade today.

Idea Cellular was at Rs 161.80, down 2.53 per cent, on the BSE. It touched a low of Rs 160.80 and a high of Rs 164.30 in trade today.

Reliance Communications was at Rs 79.95, up 0.38 per cent, on the BSE. It touched a low of Rs 79.25 and a high of Rs 80.25 in trade today.