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Tuesday October 6, 10:50 AM
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Telecom stocks slide on falling tariffs
NEW DELHI (Reuters) - Shares in leading telecoms firms Bharti Airtel (BHARTIARTL.BO : 283.65 +2.65
) and Reliance Communications (RCOM.NS : 166.6 -1.5
) fell around 10 percent on Tuesday on fears increasing competition and falling tariffs could eat into the sector's profitability.
At 10:18 a.m. (0448 GMT), top mobile operator Bharti Airtel's shares were down 9.1 percent at 363.80 rupees, having fallen as much as 10 percent.
Reliance Communications fell 12.1 percent to 263.95 rupees in a Mumbai market down just 0.6 percent.
Reliance Communications on Monday reduced all tariffs to a flat 50 paise (1 U.S. cent) per minute.
Newspapers also said the telecoms regulator TRAI plans to ask operators to bill customers on a per-second basis from the current per-minute billing, a move that could hit the revenue of companies.
"There will be pressure on the telecom sector," said R.K. Gupta, managing director at Taurus Asset Management.
"TRAI has spoken about per-second billing, this will bring down revenues and future profit margins will also be under pressure."
(Reporting by Devidutta Tripathy and C.J. Kuncheria)
(For more news on Reuters Money click http://www.reutersmoney.in)
