The latest tariff war among the domestic telecom service providers triggered by the Anil Ambani group controlled Reliance Communications (RCom) on Monday, had its echo heard in Singapore with its national telecom carrier, Singapore Telecommunications Ltd (SingTel), tanking more than 5% on the bourses in three successive trading sessions since RCom rang in its new tariff plans.
SingTel effectively holds a 30% stake in the Sunil Mittal-controlled BhartiAirtel, the single largest GSM telecom service provider with over 32% market share. RCom had rolled out a 50 paise per minute tariff plan across its services and platforms other than the international routes in response to the per second billing plan announced earlier by rival Tata DoCoMo.
In a regulatory filing with the Australian Stock Exchange, SingTel said that a major reason for the erosion in its stock prices since October 5 was the slide of the Bharti stock on the bourses. ?The price change in the securities of the company listed on the ASX may be attributed to a fall in Bharti Airtel’s share price over the last two days on 5 and 6 October, 2009, possibly in response to news of increased competition in the Indian mobile telecommunication market. The company holds a 30% effective interest in Bharti Airtel Ltd,? SingTel said in its filing with ASX.
The new tariff war triggered by RCom had shaved off the market capitalisation of major listed domestic telecom companies with market leader Bharti taking the maximum hit–close to 9%.
The stock closed on Wednesday on the NSE at Rs 358.25, down 0.31%. The stock was trading at the Rs 435 level before RCom announced its new tariff plan with an yearly high of Rs 1,036 and an yearly low of Rs 349.30
The SingTel scrip, since Monday, lost a cumulative 6.5% of its value, tumbling from Aus $2.61 on Monday to Aus $2.49 as of the closing of trade on ASX on Wednesday.
ASX had sent a missive to SingTel early this week asking it to explain the reasons behind the price movement of its stock.