Telecom firms still on slide

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Mumbai: Shares of telecom companies continued to decline amid the ongoing tariff war and the losses of market leaders like Bharti Airtel and Reliance Communications so far this month almost at par.

Since the tariff war started on October 5, Bharti Airtel, which enjoys the largest market share, has declined over 23 per cent, while Anil Ambani led Reliance Communications has tanked nearly 31 per cent on the Bombay Stock Exchange.

“Telecom stocks are continuously coming down. The per second plan would act negatively for these companies and accordingly most of the brokerage houses have downgraded the sector,” Ashika Stock Brokers Research Head Paras Bothra said.

Regarding RCom, which has tanked over 34 per cent so far this year and 9 per cent since the news of overstatement of revenues and evasion of licence fee by the company surfaced, experts said “the slide in the stock was more to do with the tariff war than the audit report and the fact that the company changed from CDMA to GSM also strained its balance sheet.” Since October 5, shares of Idea Cellular has plunged 13.32 per cent, while the scrip of Tata Teleservices Maharashtra was down 3.37 per cent.

“In the midst of the tariff war, the face of telecom industry is changing, the telecom story is being re-looked by the investor community. The winner in this case is customers and the losers are the companies.” SMC Capitals head of equity Jagannadham Thunuguntla said.

Earlier this month, telecom regulator mooted the plan to ask all the operators to consider per-second pulse as a mandatory tariff option along with their other tariff plans.

Paying tariff based on usage per second instead of the current per minute pulse, would heavily impact the profitability of the telecom operators and on these concerns shares of all major telecom companies slipped into the red.

Bharti Airtel today settled for the day at Rs 325.10, down 4.21 per cent, Reliance Communications was quoted at Rs 229.20, down 1.04, Idea Cellular was in the positive territory at Rs 62.30, up 1.14 per cent and Tata Teleservices Maharashtra was at Rs 32.60, up 1.01 per cent.