Telecom stocks soar after Airtel hikes tariff

Led by Anil Ambani controlled Reliance Communication, telecom stocks soared Monday from expectations that these companies would hike tariffs after Bharti Airtel raised call rates by 20 percent over the weekend. Bharti Airtel's move has given a break to the cut-throat competition among telecom operators who were so far offering dirt cheap tariffs.

 

At

the Bombay Stock Exchange, the shares of Reliance Communications rose a whopping 14.91 percent up at Rs.107.50. The scrip had touched an intra-day high of Rs.108.50.
With the entry of new players and the ensuing tariff wars, the high priced bidding for 3G auctions, which saw top operators like Bharti Airtel and Reliance Communications coughing up Rs.12,295 crore and Rs.8,583 crore respectively, had led to margins being hammered. Bharti Airtel's shares closed 5.37 percent up at Rs.433, slipping a bit from its intra-day high of Rs.438.5, while Tata Communications scrip moved up 5.65 percent at Rs.232.75. It had risen to a high of Rs.234.35 during the day. Aditya Birla group's Idea Cellullar shares closed 7.97 percent up at Rs.92.10.
Among the 13 sectoral indices on the BSE, the telecom index came out tops. The Indian telecom story has been marred in the last few years, following unearthing of the scam in allocation of second generation spectrum. The scandal had also led to a crisis of confidence in these stocks on the bourses. -IANS

 

Mukesh Gupta / Reuters