Even as the Sensex recovered by 92 points,telecom giant Bharti Airtel,which last week called off talks for an alliance with South Africa’s MTN,fell 10.2 per cent to Rs 359.40,its lowest close since April 28,on concerns over its long-term outlook on falling call tariffs and increasing competition.
With this,Bharti stock has fallen 17.4 per cent in the last two trading sessions. The market cap of Bharti has plummeted by Rs 28,844 crore during the period.
Following suit,Reliance Communications shares fell 10.6 per cent to Rs 268.25,a day after the second largest mobile firm cut call charges across all networks to a flat 50 paise a minute,which is likely to fuel a tariff war in the world’s fastest growing telecoms market. The move came after an almost similar tariff cut by Bharti last month and analysts said other operators may have to match it,clouding earnings growth prospects. Telecom 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 revenues of companies. The policies that are coming may be good for the consumers,but are bad for companies. Competition will only intensify further, said a dealer.
However,the market recovered on Tuesday after a stronger start in European markets helped revive hopes for a global economic recovery,but telecom stocks tumbled on profitability concerns for the sector. The Sensex rose 92.13 points to 16,958.54. The NSE Nifty index firmed 0.48 per cent to 5,027.40. With agencies