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November 30, 2010, 6:02 AM EST
By Shikhar Balwani
Nov. 30 (Bloomberg) -- Bharti Airtel Ltd., India’s largest mobile-phone operator, gained the most in almost five months in Mumbai trading on speculation the company may benefit if India’s government cancels licenses of some competitors.
The stock jumped 6.3 percent, the most since July 9, to 360.15 rupees, as of the 3:30 p.m. close in the city. Reliance Communications Ltd., the second-largest operator, and Idea Cellular Ltd. also rose.
India will send notices to some phone operators asking them why their airwave licenses shouldn’t be canceled for not meeting eligibility criteria, the Department of Telecommunications said yesterday. The companies will be given 60 days to respond, Kapil Sibal, communications minister, said in New Delhi. That is “positive” for Bharti and Idea as any cancellation of license will reduce competition in the industry, G.V. Giri, an analyst at IIFL Capital Ltd. wrote in a note dated today.
“With this, the stage is set for a comprehensive improvement in the regulatory environment, especially relating to transparency and license payout risk,” wrote Giri, who boosted his rating on Bharti to “buy” from “reduce.”
Giri raised his target price for the stock, which has lagged behind the gains in the benchmark Sensitive Index this year, to 399 rupees from 280 rupees earlier.
The owners of 85 airwave licenses awarded in 2008 will be given 60 days to respond, Sibal said. Separately, 119 phone companies that haven’t met the network rollout commitments will be issued notices, he said, without naming any company.
Reliance Communications, whose shares reached a record low yesterday after the Supreme Court asked it to pay more charges related to routing phone calls, rose after the company said it doesn’t expect any “material liability” from the judgment.
Reliance Communications rose 3.2 percent to 131.80 rupees, its first gain in six days. Idea climbed 3.9 percent to 72.55 rupees.
--With assistance from Subramaniam Sharma in New Delhi. Editors: Anand Krishnamoorthy, Vipin V. Nair.
To contact the reporter on this story: Shikhar Balwani in Mumbai sbalwani@bloomberg.net.
To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net.
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Nov. 30 (Bloomberg) -- Bharti Airtel Ltd., India’s largest mobile-phone operator, gained the most in almost five months in Mumbai trading on speculation the company may benefit if India’s government cancels licenses of some competitors.
The stock jumped 6.3 percent, the most since July 9, to 360.15 rupees, as of the 3:30 p.m. close in the city. Reliance Communications Ltd., the second-largest operator, and Idea Cellular Ltd. also rose.
India will send notices to some phone operators asking them why their airwave licenses shouldn’t be canceled for not meeting eligibility criteria, the Department of Telecommunications said yesterday. The companies will be given 60 days to respond, Kapil Sibal, communications minister, said in New Delhi. That is “positive” for Bharti and Idea as any cancellation of license will reduce competition in the industry, G.V. Giri, an analyst at IIFL Capital Ltd. wrote in a note dated today.
“With this, the stage is set for a comprehensive improvement in the regulatory environment, especially relating to transparency and license payout risk,” wrote Giri, who boosted his rating on Bharti to “buy” from “reduce.”
Giri raised his target price for the stock, which has lagged behind the gains in the benchmark Sensitive Index this year, to 399 rupees from 280 rupees earlier.
The owners of 85 airwave licenses awarded in 2008 will be given 60 days to respond, Sibal said. Separately, 119 phone companies that haven’t met the network rollout commitments will be issued notices, he said, without naming any company.
Reliance Communications, whose shares reached a record low yesterday after the Supreme Court asked it to pay more charges related to routing phone calls, rose after the company said it doesn’t expect any “material liability” from the judgment.
Reliance Communications rose 3.2 percent to 131.80 rupees, its first gain in six days. Idea climbed 3.9 percent to 72.55 rupees.
--With assistance from Subramaniam Sharma in New Delhi. Editors: Anand Krishnamoorthy, Vipin V. Nair.
To contact the reporter on this story: Shikhar Balwani in Mumbai sbalwani@bloomberg.net.
To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net.
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