Tuesday, April 29, 2008

Fresh tariff war hits telecom stocks

Top two telecom stocks were down by 0.61% to 1.28% after these firms reduced long distance telephone calls, aiming to increase their market share in rural areas.

Shares of India’s largest listed telecom service provider by market share Bharti Airtel were down 1.28% to Rs 916. Bharti Airtel said on Monday, 28 April 2008, it had slashed long distance and roaming tariffs by 43% effective 30 April 2008. Airtel has reduced its STD rates by 43% to Rs 1.50 per minute from the earlier rate of Re 2.65 per minute. The firm has also aligned roaming rates closer to local call rates.

India’s second largest listed telecom service provider by sales Reliance Communications (RCom) was down 0.61% to Rs 581.25. RCom said on Monday it would offer unlimited national long distance calls within its network for a fixed rental with immediate effect.

The fresh tariff war by Airtel and RCom has triggered expectations of similar announcements by the competitors such Idea Cellular and the unlisted Vodafone.

India's third largest telecom service provider by sales Idea Cellular was down 0.55% to Rs 105.45.

According to reports, the 700-million strong rural market in India is the biggest single market in the world and the Indian telecom firms are rapidly expanding their footprint in the rural areas of the country.

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