100 Pct FDI In Telecom To Spur Interest In Upcoming Auctions: Bofa-ML


The auctions got tepid response from operators and fetched the government a fraction of the sum that was projected.

According to BofA-ML, the opening up of the telecom sector is just a first step and more policy improvements are likely. Further policy improvements especially with regard to spectrum pricing and allocation are needed.

"We expect the government to address concerns over steep reserve prices for spectrum - auctions and caps on spectrum ownership," the report said.

On July 11, telecom regulator TRAI said it had received reference from DoT seeking recommendation on spectrum price for third round of auctions and would start consultation process shortly.

In terms of companies, Bharti and Idea which already have large foreign partners (SingTel and Axiata) and are less likely to be M&A targets, the report said.

Reliance Communications has the highest leverage, besides RCom does not have any strategic foreign partner so far, it added.

As per the Department of Industrial Policy and Promotion (DIPP) Foreign Direct Investment in India's telecom sector plunged to USD 93 million in the April 2012-January 2013 period.

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Source: PTI