RCom spurts as annual wireless license fee may drop
Reliance Communications surged 4.5% to Rs 426, on hope of a cut in license fees for wireless services in the coming months.A strong 21.3 lakh shares changed hands in the counter on BSE.
Telecom shares had surged from late-January 2007 to early-February 2007 on expectations of aggressive bidding for Hutch-Essar. The expectations came true, when Vodafone, on 11 February 2007, emerged as a top-bidder for Hutchison's 67% stake in the fourth largest cellular service provider, at an enterprise value of a stunning $18.8 billion.
Reliance Communications (RCL) had surged to Rs 515.10 on 5 February 2007 from Rs 434.95 on 24 January 2007. From this high, the RCL stock had declined to Rs 407.45 by 27 February 2007, partly due to concerns of equity dilution arising from the large $1 billion foreign currency convertible bonds (FCCB) issue.
The finance minister proposed setting up a committee to consider reduction in annual licence fees and spectrum charges for wireless telephony, in order to align them with international rates. At the moment, wireless companies pay 6-10% of net revenues as license fee and 2-6% as spectrum charges based on the circle and the spectrum used. The Department of Telecom (DoT) favours a 6% annual license fee compared to the existing 6-10%, and is likely to recommend a cut. But the final call on this will be taken by the finance ministry.
Subscriptions for mobile services are growing at a fast clip in India. The country recorded 6.5 million net new subscribers in January 2007, making it the fastest growing major mobile phone market in the world.
RCL’s consolidated net profit jumped 198 % in the December 2006 quarter to Rs 924.42 crore, on 26% growth in consolidated revenue to Rs 3755.30 crore.
On 5 February 2007, RCL raised $1 billion from an FCCB issue. The conversion price for the FCCBs was pegged at Rs 661.23 per share, representing a premium of 30% to the volume weighted average price of shares on 5 February 2007. In the event that all FCCBs are fully converted into equity, the share capital of the company will increase by approximately 6.67 crore shares.
Telecom shares had surged from late-January 2007 to early-February 2007 on expectations of aggressive bidding for Hutch-Essar. The expectations came true, when Vodafone, on 11 February 2007, emerged as a top-bidder for Hutchison's 67% stake in the fourth largest cellular service provider, at an enterprise value of a stunning $18.8 billion.
Reliance Communications (RCL) had surged to Rs 515.10 on 5 February 2007 from Rs 434.95 on 24 January 2007. From this high, the RCL stock had declined to Rs 407.45 by 27 February 2007, partly due to concerns of equity dilution arising from the large $1 billion foreign currency convertible bonds (FCCB) issue.
The finance minister proposed setting up a committee to consider reduction in annual licence fees and spectrum charges for wireless telephony, in order to align them with international rates. At the moment, wireless companies pay 6-10% of net revenues as license fee and 2-6% as spectrum charges based on the circle and the spectrum used. The Department of Telecom (DoT) favours a 6% annual license fee compared to the existing 6-10%, and is likely to recommend a cut. But the final call on this will be taken by the finance ministry.
Subscriptions for mobile services are growing at a fast clip in India. The country recorded 6.5 million net new subscribers in January 2007, making it the fastest growing major mobile phone market in the world.
RCL’s consolidated net profit jumped 198 % in the December 2006 quarter to Rs 924.42 crore, on 26% growth in consolidated revenue to Rs 3755.30 crore.
On 5 February 2007, RCL raised $1 billion from an FCCB issue. The conversion price for the FCCBs was pegged at Rs 661.23 per share, representing a premium of 30% to the volume weighted average price of shares on 5 February 2007. In the event that all FCCBs are fully converted into equity, the share capital of the company will increase by approximately 6.67 crore shares.
Labels: Reliance Comm
posted by SY at 7:14 PM
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