On The Stock Exchange, Mumbai (BSE), the stock of the overseas telecom service provider moved lower by three per cent as it closed at Rs 86.70 as against its previous close at Rs 89.40. As many as 62,313 shares of the company changed hands on the counter on Tuesday.
Dealers said that the stock declined today mainly on fears that the monopoly of VSNL has effectively ended, following reports that cellular companies, which slashed national long-distance rates recently, now plan to make big cuts in international call charges.
As per reports, the cellular services providers plan to slash international call rates by 50 per cent to Rs 12 per minute from Rs 24 per minute charged for calls made to the United States, Europe and the middle-East, dealers informed. Dealers also said that there has been a steep fall in ILD rates after these services were opened up from April 1, 2002. This effectively ended VSNLs monopoly in ILD. Presently, VSNL is the largest ILD player with more than 50 per cent market share. The impact of falling tariffs and intensified competition is clearly visible in VSNLs financial performance also.
Analysts said that for the first half, VSNLs revenue plummeted 16 per cent to Rs 2,620.9 crore and net profit dipped 31 per cent to Rs 507.10 crore.