Even as the Sensex managed to close in the green zone,telecom stocks were hammered further on Thursday amidst worries falling tariffs and increased competition will squeeze profit margins of the sector. With telecom shares slumping about a fifth this week,market capitalisation of three leading telecom players Bharti Airtel,Reliance Communications and Idea Cellular have fallen by Rs 56,500 crore since October 1 this year. Bharti,which called off talks for a proposed-tie up with South Africas MTN last month,fell for the fourth straight session taking its losses this week to over 23 per cent. It closed 6.6 per cent lower at Rs 334.65 after hitting 331.25,which was its lowest in nearly six months. With this,Bharti stock has fallen 23.1 per cent and its market cap crashed by Rs 38,243 crore to Rs 127,093 crore since October 1,2009. Reliance Communications shed 6 per cent to Rs 246.30. RCom stocks also slid 22.55 per cent in the last one week. Its market cap declined by Rs 14,800 crore to Rs 50,836 crore during the period. Idea Cellular shares fell by 11.3 per cent and market cap by Rs 3,500 crore. We maintain our cautious view on the sector and expect war cries as regards intensifying competition and lower tariffs to get louder, ICICI Securities said in a note on Tuesday. TRAI had said it is evaluating the possibilities of making it mandatory for telecom operators to offer a per-second billing plan as an option along with their other schemes to the subscribers. The intensifying tariff war among telecommunication players in India is likely to result in consolidation of smaller,regional and startup operators in the telecom space,global research firm Macquarie said. This rapid re-basing in pricing by an incumbent (as announced on Monday) will seriously affect and threaten smaller,regional and startup operators,perhaps shortening the period before which industry consolidation inevitably takes place, Macquarie said in its research report. REGULATOR ASSESSING PER-SECOND BILLING OPTION FOR OPERATORS New Delhi: Telecom regulator TRAI on Thursday said it is evaluating the possibilities of making it mandatory for telecom operators to offer a per-second billing plan as an option along with their other schemes to the subscribers. It is a proposal. We are not deciding anything today. Per-second billing will be one of the options that (telecom) service providers have to provide to the subscribers, TRAI chairman J S Sarma said. He added that operators can offer it along with other plans (per-minute). PTI
