MTNL Up 4% On Trai Rental Hike Move

Mumbai, January 27: | Updated: Jan 28 2003, 05:30am hrs
Shares of Mahanagr Telephone Nigam Ltd (MTNL) got a boost in an otherwise lacklustre market on Monday. The scrip moved up on the back of the Telecom Regulatory Authority of Indias (Trai) announcement hiking monthly rentals an indication that the companys revenues may increase.

On The Stock Exchange, Mumbai (BSE), the stock of the state-run basic telephone service provider rose 4.5 per cent to close at Rs 89.30 as against its previous close of Rs 85.25. As many as 6,94,139 changed hands today.

Dealers said buying interest on the counter was purely due to Trais announcement, which is expected to boost revenues of MTNL, a major player in urban telecom service. In 24 sessions between December 20, 2002, and January 24, 2003, the scrip had shed 20.5 per cent to Rs 85.25 from Rs 107.20, dealers said.

Trai has announced that monthly rentals for fixed line telephones would be hiked to 12 per cent. The authority has also reduced call size to two minutes from three minutes, besides slashing free calls by half to 30. Also, the number of cheap calls has been reduced by 40 per cent. However, analysts feel that new and aggressive competition in the telecom sector is taking its toll on the company. They further warn that tougher days are in store for the PSU telecom service provider

Analysts opined that funds have started moving out of the counter following concerns over the companys future growth prospects.