Published on Wed, Dec 17, 2008 at 15:07 | Source : Moneycontrol.com
Updated at Wed, Dec 17, 2008 at 15:17
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Buy Bharti Airtel, Idea Cellular: IIFL
IIFL has recommended to buy Bharti Airtel with a target of Rs 877 and Idea Cellular with a target of Rs 72, add Reliance Communications (RCOM) with a target of Rs 360, sell Tata Communications with a target of Rs 335 and MTNL with a target of Rs 85.
As expected the 3G & BWA auctions information memo carries some unexpected twists it permits foreign companies to bid within the 74% FDI ceiling and simultaneously permits incumbents to own 26% in another bidding entity creating the possibility that foreign companies and incumbents may associate through this route. No separate 3G spectrum charges will be levied but 2G spectrum charges will apply on 2G and 3G revenues creating a possible incentive for incumbent GSM operators to liberate and return excess 2G spectrum by migrating traffic to 3G and thus lowering spectrum charges. The 3G auctions will be for the 2100MHz band and for fewer blocks than expected and will commence on 16th January 2009. The government is expected to wrap up the entire process by February 2009. The document is very detailed and professionally organised which indicates the governments desire to ensure timely completion of the entire process.
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