Telecom firms tripped by access deficit ruling

DALAL STREET SPIKES

Telecom stocks witnessed selling pressure amid concerns on telecom regulator Trai's recommendations on access deficit charge. Trai is proposing to charge telecom operators 2-5 per cent of total revenues instead of the current 30-80 paise charged on each call.

As a result, state-run MTNL crashed 8.14 per cent to Rs 117.90 and Bharti Tele-Ventures plunged 3.14 per cent to Rs 126.30. The fall was also on higher volumes of 26.91 lakh share at the MTNL counter and 11.82 lakh shares at the Bharti counter.

These stocks were also hammered on reports that the mobile phone market in India, reputed to be the fastest growing market in the world, is suffering from declining average revenues per user (ARPU) on account of intense competition in both the CDMA and GSM-based cellular service.

The Telecom Regulatory Authority said on Wednesday (June 23), ARPU for GSM operators fell 4.6 per cent to Rs 436 per month in the January-March 2004 quarter from Rs 457 during the October-December period.