Recommend sell on Bharti, Idea: KIM ENG Securities India

KIM ENG Securities India believes that increased license / spectrum costs and declining revenue worries Indian telecom sector. It has not compulsory to sell Bharti Airtel and idea.

Yesterday, Telecom shares fell by 5% as government regulators not compulsory charging operators for 2G band (above 6.2 MHz). The proposed one-time close of today's 3G tender prices and will be compare to the rates incur and the outstanding licensing age.

Bharti Airtel would pay Rs 22000000000 and Idea Cellular Rs 9 billion, while Reliance Communications and Tata Teleservices will incur no tax, as their 2G range is 6.2MHz.

The direction could go ahead with the proposal in this quarter, and create a turnover of Rs 105billion. Given the concern over rising license / gamut costs and decreasing revenues, we maintain "half-starved" the telecommunications sector and recommend SELL for Bharti and IDEA, "the recommendation said.Recommend sell on Bharti, Idea: KIM ENG Securities India.