Telecom stocks surge 11% on new roaming regulations
Mumbai: Led by Reliance Communications, shares of telecom firms Tuesday rose 11 percent after sectoral regulator Trai decided not to make roaming services completely free of charge.
Instead, the Telecom Regulatory Authority of India allowed free mobile roaming as an option only on payment of a fixed fee from July 1, while reducing national roaming charges for other subscribers by up to 57 percent.
Shares of Reliance Comm jumped 11.14 percent to close at Rs 123.70, while Idea Cellular rose by 1.29 percent to Rs 141.50 on the BSE. Tata Teleservices (Maharashtra) Ltd was up 2.55 percent at Rs 6.04.
Industry leader Bharti Airtel, however, fell by 1.67 percent to Rs 291.45 after logging gains in the early trade.
"Trai's new roaming regulations are seen to be less stringent than expected. Buying interest was seen in telecom stocks," said Milan Bavishi, Head Research, Inventure Growth and Securities.
"In the context of prevalent concerns regarding free- roaming, we believe that Trai order is positive for the industry and provides flexibility to subscribers as well as operators. Complete abolition of roaming charges would have resulted in higher impact for operators and forced them to raise tariffs," Motilal Oswal Securities said in a report.
"The authority has decided to reduce the ceiling (upper price for roaming call and SMS rates) across board, permitting telecom providers to issue special tariff voucher and mandating that a roaming plan will be offered (for post paid customers)," Trai Chairman Rahul Khullar had said yesterday.
The broader market, however, saw weak trading with the BSE benchmark Sensex falling by 102.59 points to 19,223.28.