Tue Nov 26 20:58:12 UTC 2024: ## Telecom Stocks Soar on Bank Guarantee Waiver Rumor
**Mumbai, November 26, 2024** – Shares in several Indian telecom companies surged on Tuesday following reports that the Union Cabinet had approved a waiver of bank guarantees for spectrum purchased before 2022. Vodafone Idea, MTNL, and Indus Towers saw significant gains in early trading, although official confirmation of the waiver is still pending.
While reports fueled the market rally, Vodafone Idea and MTNL issued statements indicating they had not yet received official communication from the government regarding the bank guarantee waiver. Despite this lack of confirmation, Vodafone Idea shares closed up nearly 19% on the NSE, trading at ₹8.28, while MTNL shares saw gains of almost 9%, reaching a high of ₹51.45.
The positive sentiment, however, contrasts with recent subscriber loss data released by the Telecom Regulatory Authority of India (TRAI). Both Vodafone Idea and Bharti Airtel reported a decline in subscribers in September 2024, attributed to tariff hikes implemented in July. Analysts at JM Financial suggest that Vodafone Idea needs substantial capital expenditure to improve its 4G network and stem further subscriber losses. The reported subscriber losses for Vodafone Idea and Bharti Airtel were 1.55 million and 1.43 million respectively.
The market’s response highlights the significant impact of government policy on the telecom sector and the speculative nature of trading based on unconfirmed reports. While the potential waiver of bank guarantees would offer substantial relief to telecom operators, the lack of official confirmation leaves the future trajectory of these stocks uncertain.
First Piper 